chk06182008_ex416.htm


     

    Exhibit
4.1.6


    CERTIFICATE
OF DESIGNATION

     

    OF

     

    5.00%
CUMULATIVE CONVERTIBLE PREFERRED STOCK (SERIES 2005B)

     

    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 and the dividend rate 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;
Ranking

     

    (a) There
shall be created from the 20,000,000 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 “5.00% Cumulative
Convertible Preferred Stock (Series 2005B),” par value $0.01 per share (the
“Preferred Stock”), and the number of shares of such series shall be
5,750,000.  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.

     

    (b) The
Preferred Stock will, with respect to both dividend rights and rights upon the
liquidation, winding-up or dissolution of the Company, rank on a parity with the
6.00% Preferred Stock, the 5.00% Preferred Stock (Series 2003), the 4.125%
Preferred Stock, the 5.00% Preferred Stock (Series 2005) and the 4.50% Preferred
Stock and the Preferred Stock will, with respect to dividend rights or rights
upon the liquidation, winding-up or dissolution of the Company rank
(i)  senior to all Junior Stock, (ii) on a parity with all other
Parity Stock and (iii) junior to all Senior Stock.

     

    2. Definitions.  As
used herein, the following terms shall have the following meanings:

     

    (a) “4.125%
Preferred Stock” shall mean the series of preferred stock, par value $0.01 per
share, of the Company designated as the “4.125% Cumulative Convertible Preferred
Stock.”

     

    (b) “4.50%
Preferred Stock” shall mean the series of preferred stock, par value $0.01 per
share, of the Company designated as the “4.50% Cumulative Convertible Preferred
Stock.”

     

    (c) “5.00%
Preferred Stock (Series 2003)” shall mean the series of preferred stock, par
value $0.01 per share, of the Company designated as the “5.00% Cumulative
Convertible Preferred Stock.”

     

    (d) “5.00%
Preferred Stock (Series 2005)” shall mean the series of preferred stock, par
value $0.01 per share, of the Company designated as the “5.00% Cumulative
Convertible Preferred Stock (Series 2005).”

     

    (e) “6.00%
Preferred Stock” shall mean the series of preferred stock, par value $0.01 per
share, of the Company designated as the “6.00% Cumulative Convertible Preferred
Stock.”

     

    (f) “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 Payment Date) to but not including such date.

     

    (g) “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 on or 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.

     

    (h) “Affiliate”
shall have the meaning ascribed to it, on the date hereof, under Rule 405
of the Securities Act of 1933, as amended.

     

    (i) “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.

     

    (j) “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.

     

    (k) “Closing
Sale Price” of the Common Stock on any date means the closing sale price per
share (or if no closing sale price is reported, the average of the closing bid
and ask prices or, if more than one in either case, the average of the average
closing bid and the average closing ask prices) on such date as reported on the
principal United States securities exchange on which the Common Stock is traded
or, if the Common Stock is not listed on a United States national or regional
securities exchange, as reported by Nasdaq or by the National Quotation Bureau
Incorporated. In the absence of such a quotation, the Closing Sale Price will be
an amount determined in good faith by the Board of Directors to be the fair
value of the Common Stock.

     

    (l) “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, merger, consolidation or similar transaction in which the Company
is a constituent corporation.

     

    (m) “Conversion
Price” shall mean $39.07, subject to adjustment as set forth in
Section 7(d).

     

    (n) “DTC” or
“Depository” shall mean The Depository Trust Company.

     

    (o) “Dividend
Payment Date” shall mean February 15, May 15, August 15 and
November 15 of each year, commencing February 15, 2006.

     

    (p) “Dividend
Record Date” shall mean February 1, May 1, August 1 and
November 1 of each year.

     

    (q) “Effective
Date” shall mean the date on which a Fundamental Change event
occurs.

     

    (r) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.

     

    (s) “Fundamental
Change” 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 (determined on a consolidated basis)
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
the consummation of which would result in 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) other
than Permitted Holders of beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) 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), 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 or group 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 (for the purposes of this definition, such other Person or group
shall be deemed to beneficially own any Voting Stock of a specified corporation
held by a parent corporation, if such other Person or group 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; (iv) during any period of two
consecutive years, individuals who at the beginning of such period comprised the
Board of Directors of the Company (together with any new directors whose
election by such Board of Directors or whose nomination for election 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; or (v) the Common Stock ceases to
be listed on a national securities exchange or quoted on Nasdaq or another
over-the-counter market in the United States; provided, however, that a
Fundamental Change will not be deemed to have occurred in the case of a merger
or consolidation, if (i) at least 90% of the consideration (excluding cash
payments for fractional shares and cash payments pursuant to dissenters’
appraisal rights) in the merger or consolidation consists of common stock of a
United States company traded on a national securities exchange or quoted on
Nasdaq (or which will be so traded or quoted when issued or exchanged in
connection with such transaction) and (ii) as a result of such transaction or
transactions the shares of Preferred Stock become convertible solely into such
common stock.

     

    (t) “Holder”
or “holder” shall mean a holder of record of the Preferred Stock.

     

    (u) “Issue
Date” shall mean November 8, 2005, the original date of issuance of the
Preferred Stock.

     

    (v) “Junior
Stock” shall mean all classes of common stock of the Company and the Series A
Junior Participating Convertible Preferred Stock and each other class of capital
stock or series of preferred stock established after the Issue Date, by the
Board of Directors, the terms of which do not expressly provide that such class
or series ranks senior to or on parity with the Preferred Stock as to dividend
rights or rights upon the liquidation, winding-up or dissolution of the
Company.

     

    (w) “Liquidation
Preference” shall mean, with respect to each share of Preferred Stock,
$100.00.

     

    (x) “Make-Whole
Premium” shall have the meaning set forth in Section 4A.

     

    (y) “Market
Value” shall mean the average Closing Sale Price of the Common Stock for a five
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) ending immediately prior to
the date of determination.

     

    (z) “NYSE”
shall mean the New York Stock Exchange, Inc.

     

    (aa) “Officer”
shall mean the Chairman of the Board of Directors, the President, any Vice
President, the Treasurer, the Secretary or any Assistant Secretary of the
Company.

     

    (bb) “Officers’
Certificate” shall mean a certificate signed by two Officers.

     

    (cc) “Opinion
of Counsel” shall mean a written opinion from legal counsel who is acceptable to
the Transfer Agent.  The counsel may be an employee of or counsel to
the Company or the Transfer Agent.

     

    (dd) “Parity
Stock” shall mean 6.00% Preferred Stock, the 5.00% Preferred Stock (Series
2003), the 5.00% Preferred Stock (Series 2005), the 4.50% Preferred Stock, the
4.125% Preferred Stock and any class of capital stock or series of preferred
stock established after the Issue Date by the Board of Directors, the terms of
which expressly provide that such class or series will rank on parity with the
Preferred Stock as to dividend rights or rights upon the liquidation, winding-up
or dissolution of the Company.

     

    (ee) “Permitted
Holders” means Aubrey K. McClendon and Tom L. Ward and their respective
Affiliates.

     

    (ff) “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.

     

    (gg) “Purchase
Agreement” shall mean that certain Purchase Agreement with respect to the
Preferred Stock, dated November 2, 2005, among the Company, Deutsche Bank
Securities Inc., Banc of America Securities LLC, Credit Suisse First Boston LLC,
Lehman Brothers Inc. and UBS Securities LLC and the other initial purchasers
named therein.

     

    (hh) “Registration
Rights Agreement” means the Registration Rights Agreement to be dated November
8, 2005, among the Company, Deutsche Bank Securities Inc., Banc of America
Securities LLC, Credit Suisse First Boston LLC, Lehman Brothers Inc. and UBS
Securities LLC and the other initial purchasers named in the Purchase Agreement,
with respect to the Preferred Stock.

     

    (ii) “SEC” or
“Commission” shall mean the Securities and Exchange Commission.

     

    (jj) “Securities
Act” shall mean the Securities Act of 1933, as amended.

     

    (kk) “Senior
Stock” shall mean each class of capital stock or series of preferred stock
established after the Issue Date by the Board of Directors, the terms of which
expressly provide that such class or series will rank senior to the Preferred
Stock as to dividend rights or rights upon the liquidation, winding-up or
dissolution of the Company.

     

    (ll) “Shelf
Registration Statement” shall mean a shelf registration statement filed with the
SEC to cover resales of Transfer Restricted Securities by holders thereof, as
required by the Registration Rights Agreement.

     

    (mm) “Trading
Day” shall mean a day during which trading in securities generally occurs on the
New York Stock Exchange or, if Common Stock is not listed on the New York Stock
Exchange, on the principal other national or regional securities exchange on
which Common Stock is then listed or, if Common Stock is not listed on a
national or regional securities exchange, on Nasdaq or, if Common Stock is not
quoted on Nasdaq, on the principal other market on which Common Stock is then
traded.

     

    (nn) “Transfer
Agent” shall mean UMB Bank, N.A., the Company’s duly appointed transfer agent,
registrar and conversion and dividend disbursing agent for the Preferred
Stock.  The Company may, in its sole discretion, remove the Transfer
Agent with 10 days’ prior 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.

     

    (oo) “Transfer
Restricted Securities” shall mean each share of Preferred Stock (or the shares
of Common Stock issued as a dividend on the Preferred Stock or into which such
share of Preferred Stock is convertible) until (i) the date on which such
security or its predecessor has been effectively registered under the Securities
Act and disposed of in accordance with the Shelf Registration Statement or
(ii) the date on which such security or predecessor is distributed to the
public pursuant to Rule 144 under the Securities Act or is saleable
pursuant to Rule 144(k) under the Securities Act.

     

    (pp) “Voting
Rights Triggering Event” shall mean the failure of the Company to pay dividends
on the Preferred Stock with respect to six or more quarterly periods (whether or
not consecutive).

     

    (qq) “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, “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.

     

    (a) 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 of the Company legally
available therefor, to receive cumulative dividends at the rate per annum of
5.00% per share on the Liquidation Preference (equivalent to $5.00 per annum per
share), payable quarterly in arrears (the “Dividend Rate”).  The
Dividend Rate may be increased in the circumstances described in
Section 3(b) below.  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 (commencing February 15,
2006) 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 most recent
date as to which dividends shall have been paid or, if no dividends have been
paid, from the Issue Date (whether or not in any dividend period or periods
there shall be funds of the Company legally available for the payment of such
dividends) and shall accrue on a day-to-day basis, whether or not earned or
declared, from and after the Issue Date.  Dividends payable for any
partial dividend period, including the initial dividend period ending
immediately prior to February 15, 2006, shall be computed on the basis of
days elapsed over a 360-day year consisting of twelve 30-day
months.  Accumulations of dividends on shares of Preferred Stock shall
not bear interest.

     

    (b) If
(i) by March 9, 2006, the Shelf Registration Statement has not been
filed with the Commission, (ii) by July 7, 2006, the Shelf Registration
Statement has not been declared effective by the Commission or (iii) after
the Shelf Registration Statement has been declared effective, (A) the Shelf
Registration Statement thereafter ceases to be effective or (B) the Shelf
Registration Statement or the related prospectus ceases to be usable (in each
case, subject to the exceptions described below) in connection with resales of
Transfer Restricted Securities during the period that any Transfer Restricted
Securities (other than Transfer Restricted Securities held or beneficially owned
by affiliates of the Company) remain outstanding (each such event referred to in
clauses (i), (ii) and (iii), a “Registration Default”), additional
dividends shall accrue on the Preferred Stock at the rate of .50% per annum
(resulting in a Dividend Rate of 5.50% per annum during the continuance of a
Registration Default), from and including the date on which any such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured.  At all other times, dividends
shall accumulate on the Preferred Stock at the Dividend Rate as described in
Section 3(a).

     

    A
Registration Default referred to in clause (iii) of Section 3(b) shall
be deemed not to have occurred and be continuing in relation to the Shelf
Registration Statement or the related prospectus if (i) such Registration
Default has occurred solely as a result of (x) the filing of a
post-effective amendment to the Shelf Registration Statement to incorporate
annual audited financial information with respect to the Company where such
post-effective amendment is not yet effective and needs to be declared effective
to permit Holders to use the related prospectus or (y) other material
events, with respect to the Company that would need to be described in the Shelf
Registration Statement or the related prospectus and (ii) in the case of
clause (y), the Company is proceeding promptly and in good faith to amend
or supplement such Shelf Registration Statement and related prospectus to
describe such events; provided, however, that in any
case if such Registration Default referred to in clause (iii) of
Section 3(b) occurs for a continuous period in excess of 30 days,
additional dividends as described in Section 3(b) shall be payable in
accordance therewith from the day such Registration Default occurs until such
Registration Default is cured.

     

    (c) No
dividend will be declared or paid upon, or any sum set apart for the payment of
dividends upon, any outstanding share of the Preferred Stock with respect to any
dividend period unless all dividends for all preceding dividend periods have
been declared and paid or declared and a sufficient sum or number of shares of
common stock have been set apart for the payment of such dividend, upon all
outstanding shares of Preferred Stock.

     

    (d) No
dividend on the Preferred Stock will be paid in cash at any time that the
Adjusted Consolidated EBITDA Coverage Ratio (as defined as of the date hereof in
the indenture among the Company, the Subsidiary Guarantors (as defined therein)
and The Bank of New York Trust Company, N.A. dated as of June 20, 2005) is less
than 2.00 to 1.00.

     

    (e) No
dividends or other distributions (other than a dividend or distribution payable
solely in shares of Parity Stock or Junior Stock (in the case of Parity Stock)
or Junior Stock (in the case of Junior Stock) and other than cash paid in lieu
of fractional shares) may be declared, made or paid, or set apart for payment
upon, any Parity Stock or Junior Stock, nor may any Parity Stock or Junior Stock
be redeemed, purchased or otherwise acquired for any consideration (or any money
paid to or made available for a sinking fund for the redemption of any Parity
Stock or Junior Stock) by or on behalf of the Company (except by conversion into
or exchange for shares of Parity Stock or Junior Stock (in the case of Parity
Stock) or Junior Stock (in the case of Junior Stock)), unless full Accumulated
Dividends shall have been or contemporaneously are declared and paid, or are
declared and a sum or number of shares of common stock sufficient for the
payment thereof is set apart for such payment, on the Preferred Stock and any
Parity 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 and any Parity Stock, dividends may be
declared and paid on the Preferred Stock and such Parity 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 Parity Stock will in all
cases bear to each other the same ratio that accumulated and unpaid dividends
per share on the shares of Preferred Stock and such other Parity Stock bear to
each other.

     

    (f) 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.  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.

     

    (g) 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 on
the next following 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 for conversion during the period between the close of business on
any Dividend Record Date and the close of business on the Business Day
immediately preceding the applicable Dividend Payment Date must be accompanied
by payment of an amount or number of shares of Common Stock 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 the corresponding 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 with respect to a voluntary conversion
pursuant to Section 7, 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.

     

    3A.           Method of Payment of
Dividends.

     

    (a) Subject
to the restrictions set forth herein, dividends on the Preferred Stock may be
paid:

     

    (i) in
cash;

     

    (ii) by
delivery of shares of Common Stock; or

     

    (iii) through
any combination of cash and Common Stock.

     

    (b) Common
Stock issued in payment or partial payment of a dividend shall be valued for
such purpose at 97% of the Market Value as determined on the second Trading Day
immediately prior to the Dividend Record Date for such dividend.

     

    (c) Dividend
payments on the Preferred Stock will be made in cash, except to the extent the
Company elects to make all or any portion of such payment in Common Stock by
giving notice to Holders of such election and the portion of such payment that
will be made in cash and the portion of such payment that will be made in Common
Stock, 10 Trading Days prior to the Dividend Record Date for such
dividend.

     

    (d) No
fractional shares of Common Stock will be delivered to Holders in payment or
partial payment of a dividend.  A cash adjustment will be paid to each
Holder that would otherwise be entitled to a fraction of a share of Common
Stock. Any portion of any such payment that is declared and not paid through the
delivery of Common Stock will be paid in cash.

     

    (e) No
payment or partial payment of a dividend on the Preferred Stock may be made by
delivery of Common Stock unless (i) the Common Stock to be delivered as payment
therefore is freely transferable by the recipient without further action on its
behalf, other than by reason of the fact that such recipient is our affiliate,
or (ii) a Shelf Registration Statement relating to that Common Stock has been
filed with the SEC and is effective to permit the resale of that Common Stock by
the holders thereof.

     

    4. Fundamental
Change.

     

    (a) Upon the
occurrence of a Fundamental Change, each holder of Preferred Stock
shall:

     

    (i) if it
converts its Preferred Stock at any time beginning at the opening of business on
the Trading Day immediately following the Effective Date and ending at the close
of business on the 30th Trading Day immediately following the Effective Date,
receive:

     

    (A) Common
Stock and cash in lieu of fractional shares, as described in Section 7;
and

     

    (B) the
Make-Whole Premium, if any, and

     

    (ii) in the
event that the Market Value for the period ending on the Effective Date is less
than the Conversion Price, have a one-time option (the “Fundamental Change
Option”) to convert all of such Holder’s outstanding shares of Preferred Stock
into fully paid and nonassessable shares of Common Stock at an adjusted
Conversion Price equal to the greater of (x) the Market Value for the
period ending on the Effective Date and (y) $20.03.  The
Fundamental Change Option must be exercised, if at all, during the period of not
less than 30 days nor more than 60 days after the Fundamental Change Notice
Date.  In lieu of issuing the shares of Common Stock issuable upon
conversion in the event of a Fundamental Change, the Company may, at its option,
make a cash payment equal to the Market Value for each share of such Common
Stock otherwise issuable, determined for the period ending on the Effective
Date.

     

    (b) In the
event of a Fundamental Change, notice of such Fundamental Change shall be given,
within 10 Trading Days of the Effective Date, by the Company by first-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 (such date of notice, the
“Fundamental Change Notice Date”).  Each such notice shall state
(i) that a Fundamental Change has occurred; (ii) the last day on which
the Make-Whole Premium can be received upon conversion and the last day on which
the Fundamental Change Option may be exercised (each such date, an “Expiration
Date”) pursuant to the terms hereof; (iii) the name and address of the
Transfer Agent; and (iv) the procedures that holders must follow to
exercise the Fundamental Change Option.

     

    (c) On or
before the applicable Expiration Date, each holder of shares of Preferred Stock
wishing to exercise pursuant to Section 4(a) 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 4(b),
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 the shares represented by each surrendered certificate
shall be returned to authorized but unissued shares. Upon surrender (in
accordance with the notice described in Section 4(b)) 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 adjusted Conversion
Price, if applicable, as described in Section 4(a).

     

    (d) The
rights of holders of Preferred Stock pursuant to this Section 4 are in
addition to, and not in lieu of, the rights of holders of Preferred Stock
provided for in Section 7 hereof and Section 4A.

     

    4A.           Determination of the
Make-Whole Premium.

     

    (a) If a
Holder elects to convert Preferred Stock in connection with a transaction that
is a Fundamental Change, the Company shall deliver to such Holder upon
conversion, in addition to the shares of Common Stock and cash for fractional
shares under Section 4 and Section 7, a make-whole premium (the “Make-Whole
Premium”):

     

    (i) equal to
a percentage of the Liquidation Preference of the Preferred Stock converted
determined by reference to the table in clause (d) below, based on the
Effective Date and the price (the ‘‘Stock Price’’) paid, or deemed to be paid,
per share of our Common Stock in the transaction constituting the Fundamental
Change, subject to adjustment as described below; and

     

    (ii) in
addition to, and not in substitution for, any cash, securities or other assets
otherwise due to holders of Preferred Stock upon conversion.

     

    (b) The
Make-Whole Premium will be paid solely in shares of Common Stock (other than
cash in lieu of fractional shares) or in the same form of consideration into
which all or substantially all of the Common Stock has been converted or
exchanged in connection with the Fundamental Change (other than cash paid in
lieu of fractional interests in any security or pursuant to dissenters’ rights).
The Company will pay cash in lieu of fractional interests in any security or
other property delivered in connection with such Fundamental Change. The
Make-Whole Premium will be payable on the 35th Trading Day following the
Effective Date for Preferred Stock converted in connection with a Fundamental
Change. If holders of Common Stock receive or have the right to receive more
than one form of consideration in connection with such Fundamental Change, then,
for purposes of the foregoing, the forms of consideration in which the
Make-Whole Premium will be paid will be in proportion to the relative value,
determined as described below, of the different forms of consideration paid to
holders of Common Stock in connection with the Fundamental Change.

     

    (c) The Stock
Price paid, or deemed paid, per
share of Common Stock in the transaction constituting the Fundamental Change
will be calculated as follows:

     

    (i) In the
case of a Fundamental Change in which all or substantially all of the shares of
Common Stock have been, as of the Effective Date, converted into or exchanged
for the right to receive securities or other assets or property, the
consideration shall be valued as follows:

     

    (A) securities
that are traded on a U.S. national securities exchange or approved for quotation
on the Nasdaq or any similar system of automated dissemination of quotations of
securities prices, will be valued at the average of the closing prices of such
securities for the five consecutive Trading Days beginning on the second Trading
Day after the Fundamental Change Notice Date,

     

    (B) other
securities, assets or property, other than cash, that holders will have the
right to receive will be valued based on the average of the fair market value of
the securities, assets or property, other than cash, as determined by two
independent nationally recognized investment banks, and

     

    (C) 100% of
any cash.

     

    (ii) In all
other cases, the value of Common Stock will equal the average of the closing
prices of Common Stock for the five consecutive Trading Days beginning on the
second Trading Day after the Fundamental Change Notice Date.

     

    The value
of Common Stock or other consideration for purposes of determining the number of
shares of Common Stock or other consideration to be issued in respect of the
Make-Whole Premium will be calculated in the same manner, except that to the
extent such value is calculated pursuant to clause (i)(A), (i)(B) or (ii), such
value shall be multiplied by 97%.

     

    (d) The
following table sets forth the Stock Price paid, or deemed paid, per share of
Common Stock in the transaction constituting the Fundamental Change, the
Effective Date and Make-Whole Premium (expressed as a percentage of Liquidation
Preference) upon a conversion in connection with a Fundamental
Change:

     

    


    
      	
              Value
      as % of Liquidation Preference

            
	
              Effective
      Date

            
	 
      	
              11/8/2005

            	
              11/15/2006

            	
              11/15/2007

            	
              11/15/2008

            	
              11/15/2009

            	
              11/15/2010

            	
              Thereafter

            
	
              $30.05

            	
              0.0%

            	
              0.0%

            	
              0.0%

            	
              0.0%

            	
              0.0%

            	
              0.0%

            	
              0.0%

            
	
              $31.00

            	
              2.7%

            	
              2.0%

            	
              1.2%

            	
              0.4%

            	
              0.0%

            	
              0.0%

            	
              0.0%

            
	
              $32.00

            	
              4.7%

            	
              3.7%

            	
              2.8%

            	
              2.2%

            	
              1.8%

            	
              1.7%

            	
              1.7%

            
	
              $33.00

            	
              6.7%

            	
              5.7%

            	
              4.6%

            	
              3.6%

            	
              3.1%

            	
              3.1%

            	
              3.1%

            
	
              $34.00

            	
              8.5%

            	
              7.5%

            	
              6.5%

            	
              5.5%

            	
              4.8%

            	
              4.7%

            	
              4.7%

            
	
              $35.00

            	
              10.6%

            	
              9.4%

            	
              8.1%

            	
              7.2%

            	
              6.5%

            	
              6.4%

            	
              6.4%

            
	
              $40.00

            	
              18.2%

            	
              17.0%

            	
              15.6%

            	
              14.0%

            	
              12.2%

            	
              11.3%

            	
              11.3%

            
	
              $45.00

            	
              16.2%

            	
              14.7%

            	
              12.8%

            	
              11.1%

            	
              9.1%

            	
              7.3%

            	
              7.3%

            
	
              $50.00

            	
              14.3%

            	
              12.9%

            	
              11.0%

            	
              8.7%

            	
              6.0%

            	
              3.0%

            	
              3.0%

            
	
              $60.00

            	
              11.4%

            	
              10.1%

            	
              8.3%

            	
              6.1%

            	
              3.4%

            	
              0.0%

            	
              0.0%

            
	
              $70.00

            	
              9.2%

            	
              8.0%

            	
              6.4%

            	
              4.5%

            	
              2.4%

            	
              0.0%

            	
              0.0%

            
	
              $80.00

            	
              7.4%

            	
              6.4%

            	
              5.0%

            	
              3.6%

            	
              1.9%

            	
              0.0%

            	
              0.0%

            
	
              $100.00

            	
              4.4%

            	
              3.8%

            	
              2.9%

            	
              2.1%

            	
              1.2%

            	
              0.0%

            	
              0.0%

            
	
              $125.00

            	
              1.8%

            	
              1.5%

            	
              1.1%

            	
              0.8%

            	
              0.4%

            	
              0.0%

            	
              0.0%

            


    

    


     

    The Stock
Prices set forth in the table will be adjusted as of any date on which the
Conversion Price of the Convertible Preferred Stock is adjusted. The adjusted
Stock Prices will equal the stock prices applicable immediately prior to the
adjustment divided by a fraction, the numerator of which is the Conversion Price
immediately prior to the adjustment to the Conversion Price and the denominator
of which is the conversion price as so adjusted.

     

    The exact
Stock Price and Effective Date may not be set forth on the table, in which
case:

     

    (i) if the
Stock Price is between two Stock Prices on the table or the Effective Date is
between two Effective Dates on the table, the Make-Whole Premium will be
determined by straight-line interpolation between Make-Whole Premium amounts set
forth for the higher and lower Stock Prices and the two Effective Dates, as
applicable, based on a 365-day year;

     

    (ii) if the
Stock Price is in excess of $125 per share (subject to adjustment in the same
manner as the Stock Price) the payment corresponding to row $125 will be paid;
and

     

    (iii) if the
Stock Price is less than or equal to $30.05 per share (subject to adjustment in
the same manner as the Stock Price), no Make-Whole Premium will be
paid.

     

    5. Voting.

     

    (a) The
shares of Preferred Stock shall have no voting rights except as set forth below
or as otherwise required by Oklahoma law from time to time:

     

    (i) If and
whenever at any time or times a Voting Rights Triggering Event occurs, then the
holders of shares of Preferred Stock, voting as a single class with any other
preferred stock or preference securities having similar voting rights that are
exercisable, including the 6.00% Preferred Stock, the 5.00% Preferred Stock
(Series 2003), the 5.00% Preferred Stock (Series 2005), the 4.50% Preferred
Stock and the 4.125% Preferred Stock (the “Voting Rights Class”), will be
entitled at the next regular or special meeting of stockholders of the Company
to elect two additional directors of the Company.  Upon the election
of any such additional directors, the number of directors that comprise the
Board of Directors shall be increased by such number of additional
directors.

     

    (ii) 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 5(a)(i)  shall terminate.

     

    (iii) At any
time when such voting rights shall have vested in holders of shares of the
Voting Rights Class, an Officer of the Company may call, and, upon written
request of the record holders of shares representing at least 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, 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 5(a)(iii), 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 5(a)(i) shall be held at such annual meeting of
stockholders.

     

    (iv) 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 any such director.

     

    (v) Any
director elected pursuant to the voting rights created under this
Section 5(a) shall hold office until the next annual meeting of
stockholders (unless such term has previously terminated pursuant to
Section 5(a)(ii) ) 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 5, 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 5 shall
terminate.

     

    (vi) 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 Senior Stock (or any
security convertible into Senior Stock) 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.

     

    (vii) In
exercising the voting rights set forth in this Section 5(a), each share of
Preferred Stock shall be entitled to one vote.

     

    (b) The
Company may authorize, increase the authorized amount of, or issue any class or
series of Parity Stock or Junior Stock, without the consent of the holders of
Preferred Stock, 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.

     

    6. Liquidation
Rights.

     

    (a) In the
event of any liquidation, winding-up or dissolution of the Company, whether
voluntary or involuntary, each holder of shares of Preferred Stock shall be
entitled to receive and to be paid out of the assets of the Company available
for distribution to its stockholders the Liquidation Preference plus Accumulated
Dividends and Accrued Dividends thereon in preference to the holders of, and
before any payment or distribution is made on, any Junior Stock, including,
without limitation, on any Common Stock.

     

    (b) Neither
the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all the assets or
business of the Company (other than in connection with the liquidation,
winding-up or dissolution of its business) nor the merger or consolidation of
the Company into or with any other Person shall be deemed to be a liquidation,
winding-up or dissolution, voluntary or involuntary, for the purposes of this
Section 6.

     

    (c) After the
payment to the holders of the shares of Preferred Stock of full preferential
amounts provided for in this Section 6, the holders of Preferred Stock as
such shall have no right or claim to any of the remaining assets of the
Company.

     

    (d) In the
event the assets of the Company available for distribution to the holders of
shares of Preferred Stock upon any liquidation, winding-up or dissolution 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 6(a), no
such distribution shall be made on account of any shares of Parity 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 Parity Stock are entitled upon such liquidation, winding-up or
dissolution.

     

    7. Conversion.

     

    (a) Each
holder of Preferred Stock shall have the right, at any time, at its option, from
the Issue Date to convert, subject to the terms and provisions of this
Section 7, any or all of such holder’s shares of Preferred
Stock.  In such 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 7(h), to the product of the number of shares
of Preferred Stock being so converted multiplied by the quotient of (i) the
Liquidation Preference divided by (ii) the Conversion Price then in
effect.

     

    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 to be maintained by
it, accompanied by written notice to the Company in the form of Exhibit B 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 7(j).  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
holder.  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 whole shares of Common Stock
into which such shares of Preferred Stock have been converted and cash, in lieu
of any fractional shares as provided in Section 7(g); (ii) receive a
Make-Whole Premium, if any, payable upon a Fundamental Change, in accordance
with Section 4A; and (iii) exercise the rights to which they are entitled
as holders of Common Stock.

     

    (b) [Intentionally
omitted].

     

    (c) [Intentionally
omitted].

     

    (d) 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) pay a dividend (or
other distribution) payable in shares of Common Stock on any class of capital
stock (which, for purposes of this Section 7(d) 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 conversion of, or payment or
partial payment of dividends on, 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 subject
to Section 7(d)(ii)) pursuant to a stockholder rights plan, “poison pill”
or similar arrangement and excluding dividends payable on the Preferred Stock
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 7(d)(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 warrants upon conversion at any time of shares of Preferred Stock
into Common 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 (d)(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) If the
Company shall at any time make a distribution, by dividend or otherwise, to all
holders of shares of its Common Stock consisting exclusively of cash (excluding
any cash portion of distributions referred to in clause (E) of
paragraph (d)(i) above and cash distributed upon a merger or consolidation
to which paragraph (h) below applies) in an amount per share of Common
Stock that, when combined with the per share amounts of all other all-cash
distributions to all holders of shares of its Common Stock made within the
90-day period ending on the record date for the distribution giving rise to an
adjustment pursuant to this Section 7(d)(iii), exceeds $0.065 per share of
Common Stock (the “Distribution  Threshold Amount”), then the
Conversion Price will be adjusted by multiplying:

     

    (1) the
Conversion Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of Common Stock entitled to
receive such distribution by

     

    (2) a
fraction, the numerator of which will be the Market Value on the fourth trading
day on the NYSE prior to such record date minus the amount of cash per share of
Common Stock so distributed in excess of the Distribution Threshold Amount for
which an adjustment has not otherwise been made pursuant to this Section
7(d)(iii) and the denominator of which will be the Market Value on the fourth
trading day on the NYSE prior to such record date.

     

    Subject
to Section 7(e), such adjustment shall become effective immediately after the
record date for the determination of holders of Common Stock entitled to receive
the distribution giving rise to an adjustment pursuant to this Section
7(d)(iii).  If an adjustment is required to be made under this
clause 7(d) as a result of a cash dividend in any quarterly period that
exceeds the Distribution Threshold Amount, the adjustment shall be based upon
the amount by which the distribution exceeds the Distribution Threshold
Amount.  If an adjustment is otherwise required to be made under this
clause 7(d), the adjustment shall be based upon the full amount of the
distribution.  The Distribution Threshold Amount is subject to
adjustment under the same circumstances under which the Conversion Price is
subject to adjustment pursuant to Section 7(d)(i) or Section
7(d)(ii).  Notwithstanding the foregoing, in no event will the
Conversion Price be less than $30.05, subject to adjustment under the same
circumstances under which the Conversion Price is subject to adjustment pursuant
to Section 7(d)(i), 7(d)(ii) and 7(d)(iv) and 7(d)(v).

     

    (iv) If the
Company shall at any time or from time to time on the record date of such
distribution;  (A) 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 7(d) has been made and (II) the aggregate amount of any such
all-cash distributions referred to in clause (iii) 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 (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 expiration of such tender offer;
or (B) 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 (d)(i), (d)(ii),
(d)(iii) above or this (d)(iv)), 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 shall not 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 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 7(d)(iv) 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.

     

    (v) 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 7(d)(i)  through
Section 7(d)(iv), inclusive, or Section 7(h), or the issuance of
shares of Common Stock as a dividend on Preferred Stock, 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).

     

    (vi) Notwithstanding
anything herein to the contrary, no adjustment under this Section 7(d) 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; provided, however, that with respect to
adjustments to be made to the Conversion Price in connection with cash dividends
paid by the Company,  the Company shall make such adjustments,
regardless of whether such aggregate adjustments amount to 1% or more of the
Conversion Price, no later than November 15 of each calendar
year.

     

    (vii) 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.

     

    (e) 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.

     

    (f) Upon any
increase or decrease in the Conversion Price, then, and in each such case, the
Company promptly shall deliver to each 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.

     

    (g) No
fractional shares or securities representing fractional shares of Common Stock
shall be issued upon the conversion of any shares of Preferred Stock, whether
voluntary or mandatory, or in respect of the payment or partial payment of
dividends on Preferred Stock in Common 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 automated 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.

     

    (h) In the
event of any reclassification 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 or merger of the Company
with or into another Person or any merger of another Person with or into the
Company (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 (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 at any time, at
the option of the holder thereof, only into the kind and amount of securities
(of the Company or another issuer), cash and other property 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 7(h) and any equivalent thereof in any such
securities similarly shall apply to successive Transactions.  The
provisions of this Section 7(h), Section 4 and Section 4A shall be the
sole rights of holders of Preferred Stock in connection with any Transaction and
such holders shall have no separate vote thereon.

     

    (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 or the payment or partial payment of dividends declared on
Preferred Stock that are payable in Common Stock.

     

    (j) The
issuance or delivery of certificates for Common Stock upon the conversion of
shares of Preferred Stock or the payment or partial payment of a dividend on
Preferred Stock in Common Stock, shall be made without charge to the converting
holder or recipient 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 the relevant Preferred Stock
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.

     

    8. Mandatory
Conversion.

     

    (a) At any
time on or after November 15, 2010, the Company shall have the right, at its
option, to cause the Preferred Stock, in whole but not in part, to be
automatically converted into that number of whole shares of Common Stock for
each share of Preferred Stock equal to the quotient of (i) the Liquidation
Preference divided by (ii) the Conversion Price then in effect, with any
resulting fractional shares of Common Stock to be settled in accordance with
Section 7(g).  The Company may exercise its right to cause a
mandatory conversion pursuant to this Section 8(a) only if the closing
price of the Common Stock equals or exceeds 130% of the Conversion Price then in
effect for at least 20 Trading Days in any consecutive 30 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),
including the last Trading Day of such 30-day period, ending on the Trading Day
prior to the Company’s issuance of a press release announcing the mandatory
conversion as described in Section 8(b).

     

    (b) To
exercise the mandatory conversion right described in Section 8(a), the
Company must issue a press release for publication on the Dow Jones News Service
prior to the opening of business on the first Trading Day following any date on
which the conditions described in Section 8(a) are met, announcing such a
mandatory conversion.  The Company shall also give notice by mail or
by publication (with subsequent prompt notice by mail) to the holders of
Preferred Stock (not more than four Business Days after the date of the press
release) of the mandatory conversion announcing the Company’s intention to
convert the Preferred Stock.  The conversion date will be a date
selected by the Company (the “Mandatory Conversion Date”) and will be no more
than ten days after the date on which the Company issues the press release
described in this Section 8(b).

     

    (c) In
addition to any information required by applicable law or regulation, the press
release and notice of a mandatory conversion described in Section 8(b)
shall state, as appropriate:  (i) the Mandatory Conversion Date;
(ii) the number of shares of Common Stock to be issued upon conversion of
each share of Preferred Stock; (iii) the number of shares of Preferred
Stock to be converted; and (iv) that dividends on the Preferred Stock to be
converted will cease to accrue on the Mandatory Conversion Date.

     

    (d) On and
after the Mandatory Conversion Date, dividends will cease to accrue on the
Preferred Stock called for a mandatory conversion pursuant to Section 8(a)
and all rights of holders of such Preferred Stock will terminate except for the
right to receive the whole shares of Common Stock issuable upon conversion
thereof and cash, in lieu of any fractional shares of Common Stock in accordance
with Section 7(g).  The dividend payment with respect to the
Preferred Stock called for a mandatory conversion pursuant to Section 8(a)
on a date during the period between the close of business on any Dividend Record
Date to the close of business on the corresponding Dividend Payment Date will be
payable on such Dividend Payment Date to the record holder of such share on such
Dividend Record Date if such share has been converted after such Dividend Record
Date and prior to such Dividend Payment Date.  Except as provided in
the immediately preceding sentence with respect to a mandatory conversion
pursuant to Section 8(a), no payment or adjustment will be made upon
conversion of Preferred Stock for Accrued Dividends or for dividends with
respect to the Common Stock issued upon such conversion.

     

    (e) The
Company may not authorize, issue a press release or give notice of any mandatory
conversion pursuant to Section 8(a) unless, prior to giving the conversion
notice, all Accumulated Dividends on the Preferred Stock for periods ended prior
to the date of such conversion notice shall have been paid.

     

    (f) In
addition to the mandatory conversion right described in Section 8(a), if
there are less than 250,000 shares of Preferred Stock outstanding, the Company
shall have the right, at any time on or after November 15, 2010, at its
option, to cause the Preferred Stock to be automatically converted into that
number of whole shares of Common Stock equal to the quotient of (i) the
Liquidation Preference divided by (ii) the lesser of (A) the
Conversion Price then in effect and (B) the Market Value for the period
ending on the second Trading Day immediately prior to the Mandatory Conversion
Date, with any resulting fractional shares of Common Stock to be settled in cash
in accordance with Section 7(g).  The provisions of
clauses (b), (c), (d) and (e) of this Section 8 shall apply to any
mandatory conversion pursuant to this clause (f); provided that
(i) the Mandatory Conversion Date described in Section 8(b) shall not
be less than 15 days nor more than 30 days after the date on which the Company
issues a press release pursuant to Section 8(b) announcing such mandatory
conversion and (ii) the press release and notice of mandatory conversion
described in Section 8(c) will not state the number of shares of Common
Stock to be issued upon conversion of each share of Preferred
Stock.

     

    9. Consolidation, Merger and
Sale of Assets.

     

    (a) The
Company, without the consent of the holders of any of the outstanding Preferred
Stock, may consolidate with or merge into any other Person or convey, transfer
or lease all or substantially all its assets to any Person or may permit any
Person to consolidate with or merge into, or transfer or lease all or
substantially all its properties to, the Company; provided, however, that (i) the
successor, transferee or lessee is organized under the laws of the United States
or any political subdivision thereof; (ii) the shares of Preferred Stock will
become shares of such successor, transferee or lessee, having in respect of such
successor, transferee or lessee the same powers, preferences and relative
participating, optional or other special rights and the
qualification,  limitations or restrictions thereon, the Preferred
Stock had immediately prior to such transaction; and (c) the Company delivers to
the Transfer Agent an Officers’ Certificate and an Opinion of Counsel stating
that such transaction complies with this Certificate of
Designation.

     

    (b) Upon any
consolidation by the Company with, or merger by the Company into, any other
person or any conveyance, transfer or lease of all or substantially all the
assets of the Company as described in Section 9(a), the successor resulting
from such consolidation or into which the Company is merged or the transferee or
lessee to which such conveyance, transfer or lease is made, will succeed to, and
be substituted for, and may exercise every right and power of, the Company under
the shares of Preferred Stock, and thereafter, except in the case of a lease,
the predecessor (if still in existence) will be released from its obligations
and covenants with respect to the Preferred Stock.  Nothing in this
Section 9 limits the rights of Holders set out in Section 4 and Section
4A.

     

    10. SEC
Reports.

     

    Whether
or not the Company is required to file reports with the Commission, if any
shares of Preferred Stock are outstanding, the Company shall file with the
Commission all such reports and other information as it would be required to
file with the Commission by Section 13(a)or 15(d) under the Exchange
Act.  The Company shall supply each holder of Preferred Stock, upon
request, without cost to such holder, copies of such reports or other
information.

     

    11. Certificates.

     

    (a) Form and
Dating.  The Preferred Stock and the Transfer Agent’s
certificate of authentication shall be substantially in the form set forth in
Exhibit A, which is hereby incorporated in and expressly made a part of this
Certificate of Designation.  The Preferred Stock certificate may have
notations, legends or endorsements required by law, stock exchange rules,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the
Company).  Each Preferred Stock certificate shall be dated the date of
its authentication.  The terms of the Preferred Stock certificate set
forth in Exhibit A are part of the terms of this Certificate of
Designation.

     

    (i) Global
Preferred Stock.  The Preferred Stock shall be issued initially in the
form of one or more fully registered global certificates with the global
securities legend and restricted securities legend set forth in Exhibit A
hereto (the “Global Preferred Stock”), which shall be deposited on behalf of the
purchasers represented thereby with the Transfer Agent, as custodian for DTC (or
with such other custodian as DTC may direct), and registered in the name of DTC
or a nominee of DTC, duly executed by the Company and authenticated by the
Transfer Agent as hereinafter provided.  The number of shares of
Preferred Stock represented by Global Preferred Stock may from time to time be
increased or decreased by adjustments made on the records of the Transfer Agent
and DTC or its nominee as hereinafter provided.  With respect to
shares of Preferred Stock that are not “restricted securities” as defined in
Rule 144 on a conversion date, all shares of Common Stock distributed on
such conversion date or the payment or partial payment of a dividend in Common
Stock will be freely transferable without restriction under the Securities Act
(other than by affiliates), and such shares will be eligible for receipt in
global form through the facilities of DTC.

     

    (ii) Book-Entry
Provisions.  In the event Global Preferred Stock is deposited with or
on behalf of DTC, the Company shall execute and the Transfer Agent shall
authenticate and deliver initially one or more Global Preferred Stock
certificates that (a) shall be registered in the name of DTC as depository for
such Global Preferred Stock or the nominee of DTC and (b) shall be delivered by
the Transfer Agent to DTC or pursuant to DTC’s instructions or held by the
Transfer Agent as custodian for DTC.

     

    Members
of, or participants in, DTC (“Agent Members”) shall have no rights under this
Certificate of Designation with respect to any Global Preferred Stock held on
their behalf by DTC or by the Transfer Agent as the custodian of DTC or under
such Global Preferred Stock, and DTC may be treated by the Company, the Transfer
Agent and any agent of the Company or the Transfer Agent as the absolute owner
of such Global Preferred Stock for all purposes
whatsoever.  Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Transfer Agent or any agent of the Company or the
Transfer Agent from giving effect to any written certification, proxy or other
authorization furnished by DTC or impair, as between DTC and its Agent Members,
the operation of customary practices of DTC governing the exercise of the rights
of a holder of a beneficial interest in any Global Preferred Stock.

     

    (iii) Certificated
Preferred Stock; Certificated Common Stock.  Except as provided in
this paragraph 11(a) or in paragraph 11(c), owners of beneficial
interests in Global Preferred Stock will not be entitled to receive physical
delivery of Preferred Stock in fully registered certificated form (“Certificated
Preferred Stock”).  With respect to shares of Preferred Stock that are
“restricted securities” as defined in Rule 144 on a conversion date, all
shares of Common Stock issuable on conversion of such shares on such conversion
date or on payment or partial payment of a dividend in Common Stock will be
issued in fully registered certificated form (“Certificated Common
Stock”).  Certificates of Certificated Common Stock will be mailed or
made available at the office of the Transfer Agent for the Preferred Stock on or
as soon as reasonably practicable after the relevant conversion date to the
converting holder.

     

    After a
transfer of any Preferred Stock or Certificated Common Stock during the period
of the effectiveness of a Shelf Registration Statement with respect to such
Preferred Stock or such Certificated Common Stock, all requirements pertaining
to legends on such Preferred Stock (including Global Preferred Stock) or
Certificated Common Stock will cease to apply, the requirements
requiring  that any such Certificated Common Stock issued to Holders
be issued in certificated form, as the case may, will cease to apply, and
Preferred Stock or Common Stock, as the case may be, in global or fully
registered certificated form, in either case without legends, will be available
to the transferee of the Holder of such Preferred Stock or Certificated Common
Stock upon exchange of such transferring Holder’s Preferred Stock or Common
Stock or directions to transfer such Holder’s interest in the Global Preferred
Stock, as applicable.

     

    (b) Execution and
Authentication.  Two Officers shall sign the Preferred Stock
certificate for the Company by manual or facsimile signature.

     

    If an
Officer whose signature is on a Preferred Stock certificate no longer holds that
office at the time the Transfer Agent authenticates the Preferred Stock
certificate, the Preferred Stock certificate shall be valid
nevertheless.

     

    A
Preferred Stock certificate shall not be valid until an authorized signatory of
the Transfer Agent manually signs the certificate of authentication on the
Preferred Stock certificate.  The signature shall be conclusive
evidence that the Preferred Stock certificate has been authenticated under this
Certificate of Designation.

     

    The
Transfer Agent shall authenticate and deliver certificates for up to 5,750,000
shares of Preferred Stock for original issue upon a written order of the Company
signed by two Officers or by an Officer and an Assistant Treasurer of the
Company.  Such order shall specify the number of shares of Preferred
Stock to be authenticated and the date on which the original issue of Preferred
Stock is to be authenticated.

     

    The
Transfer Agent may appoint an authenticating agent reasonably acceptable to the
Company to authenticate the certificates for Preferred Stock.  Unless
limited by the terms of such appointment, an authenticating agent may
authenticate certificates for Preferred Stock whenever the Transfer Agent may do
so.  Each reference in this Certificate of Designation to
authentication by the Transfer Agent includes authentication by such
agent.  An authenticating agent has the same rights as the Transfer
Agent or agent for service of notices and demands.

     

    (c) Transfer and
Exchange.  (i) Transfer and Exchange of Certificated
Preferred Stock.  When Certificated Preferred Stock is presented to
the Transfer Agent with a request to register the transfer of such Certificated
Preferred Stock or to exchange such Certificated Preferred Stock for an equal
number of shares of Certificated Preferred Stock, the Transfer Agent shall
register the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met; provided, however, that the
Certificated Preferred Stock surrendered for transfer or exchange:

     

    (1) shall be
duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Company and the Transfer Agent, duly executed by
the Holder thereof or its attorney duly authorized in writing; and

     

    (2) is being
transferred or exchanged pursuant to an effective registration statement under
the Securities Act or pursuant to clause (i)  or (ii)  below, and
is accompanied by the following additional information and documents, as
applicable:

     

    (A) if such
Certificated Preferred Stock is being delivered to the Transfer Agent by a
Holder for registration in the name of such Holder, without transfer, a
certification from such Holder to that effect in substantially the form of
Exhibit C hereto; or

     

    (B) if such
Certificated Preferred Stock is being transferred to the Company or to a
“qualified institutional buyer” (“QIB”) in accordance with Rule 144A under
the Securities Act or pursuant to another exemption from registration under the
Securities Act, (i) a certification to that effect (in substantially the
form of Exhibit C hereto) and (ii) if the Company so requests, an
Opinion of Counsel or other evidence reasonably satisfactory to it as to the
compliance with the restrictions set forth in the legend set forth in
paragraph 11(c) (vii).

     

    (ii) Restrictions
on Transfer of Certificated Preferred Stock for a Beneficial Interest in Global
Preferred Stock.  Certificated Preferred Stock may not be exchanged
for a beneficial interest in Global Preferred Stock except upon satisfaction of
the requirements set forth below.  Upon receipt by the Transfer Agent
of Certificated Preferred Stock, duly endorsed or accompanied by appropriate
instruments of transfer, in form reasonably satisfactory to the Company and the
Transfer Agent, together with written instructions directing the Transfer Agent
to make, or to direct DTC to make, an adjustment on its books and records with
respect to such Global Preferred Stock to reflect an increase in the number of
shares of Preferred Stock represented by the Global Preferred Stock, then the
Transfer Agent shall cancel such Certificated Preferred Stock and cause, or
direct DTC to cause, in accordance with the standing instructions and procedures
existing between DTC and the Transfer Agent, the number of shares of Preferred
Stock represented by the Global Preferred Stock to be increased
accordingly.  If no Global Preferred Stock is then outstanding, the
Company shall issue and the Transfer Agent shall authenticate, upon written
order of the Company in the form of an Officers’ Certificate, a new Global
Preferred Stock representing the appropriate number of shares.

     

    (iii) Transfer
and Exchange of Global Preferred Stock.  The transfer and exchange of
Global Preferred Stock or beneficial interests therein shall be effected through
DTC, in accordance with this Certificate of Designation (including applicable
restrictions on transfer set forth herein, if any) and the procedures of DTC
therefor.

     

    (iv) Transfer
of a Beneficial Interest in Global Preferred Stock for a Certificated Preferred
Stock.

     

    (1) Any
Person having a beneficial interest in Preferred Stock that is being transferred
or exchanged pursuant to an effective registration statement under the
Securities Act or pursuant to another exemption from registration thereunder may
upon request, but only with the consent of the Company, and if accompanied by a
certification from such Person to that effect (in substantially the form of
Exhibit C hereto), exchange such beneficial interest for Certificated
Preferred Stock representing the same number of shares of Preferred
Stock.  Upon receipt by the Transfer Agent of written instructions or
such other form of instructions as is customary for DTC from DTC or its nominee
on behalf of any Person having a beneficial interest in Global Preferred Stock
and upon receipt by the Transfer Agent of a written order or such other form of
instructions as is customary for DTC or the Person designated by DTC as having
such a beneficial interest in a Transfer Restricted Security only, then, the
Transfer Agent or DTC, at the direction of the Transfer Agent, will cause, in
accordance with the standing instructions and procedures existing between DTC
and the Transfer Agent, the number of shares of Preferred Stock represented by
Global Preferred Stock to be reduced on its books and records and, following
such reduction, the Company will execute and the Transfer Agent will
authenticate and deliver to the transferee Certificated Preferred
Stock.

     

    (2) Certificated
Preferred Stock issued in exchange for a beneficial interest in a Global
Preferred Stock pursuant to this paragraph 11(c)(iv) shall be
registered in such names and in such authorized denominations as DTC, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Transfer Agent.  The Transfer Agent shall deliver such
Certificated Preferred Stock to the Persons in whose names such Preferred Stock
are so registered in accordance with the instructions of DTC.

     

    (v) Restrictions
on Transfer and Exchange of Global Preferred Stock.

     

    (1) Notwithstanding
any other provisions of this Certificate of Designation (other than the
provisions set forth in paragraph 11(c)(vi)), Global Preferred Stock may
not be transferred as a whole except by DTC to a nominee of DTC or by a nominee
of DTC to DTC or another nominee of DTC or by DTC or any such nominee to a
successor depository or a nominee of such successor depository.

     

    (2) In the
event that the Global Preferred Stock is exchanged for Preferred Stock in
definitive registered form pursuant to paragraph 11(c)(vi) prior to the
effectiveness of a Shelf Registration Statement with respect to such securities,
such Preferred Stock may be exchanged only in accordance with such procedures as
are substantially consistent with the provisions of this paragraph 11(c)
(including the certification requirements set forth in the Exhibits to this
Certificate of Designation intended to ensure that such transfers comply with
Rule 144A or such other applicable exemption from registration under the
Securities Act, as the case may be) and such other procedures as may from time
to time be adopted by the Company.

     

    (vi) Authentication
of Certificated Preferred Stock.  If at any time:

     

    (1) DTC
notifies the Company that DTC is unwilling or unable to continue as depository
for the Global Preferred Stock and a successor depository for the Global
Preferred Stock is not appointed by the Company within 90 days after delivery of
such notice;

     

    (2) DTC
ceases to be a clearing agency registered under the Exchange Act and a successor
depository for the Global Preferred Stock is not appointed by the Company within
90 days; or

     

    (3) the
Company, in its sole discretion, notifies the Transfer Agent in writing that it
elects to cause the issuance of Certificated Preferred Stock under this
Certificate of Designation,

     

    then the
Company will execute, and the Transfer Agent, upon receipt of a written order of
the Company signed by two Officers or by an Officer and an Assistant Treasurer
of the Company requesting the authentication and delivery of Certificated
Preferred Stock to the Persons designated by the Company, will authenticate and
deliver Certificated Preferred Stock equal to the number of shares of Preferred
Stock represented by the Global Preferred Stock, in exchange for such Global
Preferred Stock.

     

    (vii) Legend.   

     

    (1) Except as
permitted by the following paragraph (2) and in paragraph 11(a)(iii),
each certificate evidencing the Global Preferred Stock, the Certificated
Preferred Stock and Certificated Common Stock shall bear a legend in
substantially the following form:

     

    “THIS
SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES
ACT”), AND THIS SECURITY AND ANY SECURITY ISSUABLE UPON CONVERSION HEREOF MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.

     

    THE
HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY AND ANY SECURITY ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) OUTSIDE OF THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THE SECURITIES
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT.”1

     

    (2) Upon any
sale or transfer of a Transfer Restricted Security (including any Transfer
Restricted Security represented by Global Preferred Stock) pursuant to
Rule 144 under the Securities Act or another exemption from registration
under the Securities Act or an effective registration statement under the
Securities Act:

     

    (A) in the
case of any Transfer Restricted Security that is a Certificated Preferred Stock,
the Transfer Agent shall permit the Holder thereof to exchange such Transfer
Restricted Security for Certificated Preferred Stock that does not bear a
restrictive legend and rescind any restriction on the transfer of such Transfer
Restricted Security; and

     

    (B) in the
case of any Transfer Restricted Security that is represented by a Global
Preferred Stock, with the consent of the Company, the Transfer Agent shall
permit the Holder thereof to exchange such Transfer Restricted Security for
Certificated Preferred Stock that does not bear the legend set forth above and
rescind any restriction on the transfer of such Transfer Restricted Security, if
the Holder’s request for such exchange was made in reliance on Rule 144 or
another exemption from registration under the Securities Act and the Holder
certifies to that effect in writing to the Transfer Agent (such certification to
be in the form set forth in Exhibit C hereto).

     

    (viii) Cancelation
or Adjustment of Global Preferred Stock.  At such time as all
beneficial interests in Global Preferred Stock have either been exchanged for
Certificated Preferred Stock, converted or canceled, such Global Preferred Stock
shall be returned to DTC for cancelation or retained and canceled by the
Transfer Agent.  At any time prior to such cancelation, if any
beneficial interest in Global Preferred Stock is exchanged for Certificated
Preferred Stock, converted or canceled, the number of shares of Preferred Stock
represented by such Global Preferred Stock shall be reduced and an adjustment
shall be made on the books and records of the Transfer Agent with respect to
such Global Preferred Stock, by the Transfer Agent or DTC, to reflect such
reduction.

     

    (ix) Obligations
with Respect to Transfers and Exchanges of Preferred Stock.

     

    (1) To permit
registrations of transfers and exchanges, the Company shall execute and the
Transfer Agent shall authenticate Certificated Preferred Stock and Global
Preferred Stock as required pursuant to the provisions of this
paragraph 11(c).

     

    (2) All
Certificated Preferred Stock and Global Preferred Stock issued upon any
registration of transfer or exchange of Certificated Preferred Stock or Global
Preferred Stock shall be the valid obligations of the Company, entitled to the
same benefits under this Certificate of Designation as the Certificated
Preferred Stock or Global Preferred Stock surrendered upon such registration of
transfer or exchange.

     

    (3) Prior to
due presentment for registration of transfer of any shares of Preferred Stock,
the Transfer Agent and the Company may deem and treat the Person in whose name
such shares of Preferred Stock are registered as the absolute owner of such
Preferred Stock and neither the Transfer Agent nor the Company shall be affected
by notice to the contrary.

     

    (4) No
service charge shall be made to a Holder for any registration of transfer or
exchange upon surrender of any Preferred Stock certificate or Common Stock
certificate at the office of the Transfer Agent maintained for that
purpose.  However, the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Preferred Stock certificates or
Common Stock certificates.

     

    (5) Upon any
sale or transfer of shares of Preferred Stock (including any Preferred Stock
represented by a Global Preferred Stock Certificate), Certificated Common Stock
pursuant to an effective registration statement under the Securities Act or
pursuant to Rule 144 or another exemption from registration under the
Securities Act (and based upon an Opinion of Counsel reasonably satisfactory to
the Company if it so requests) or the issue of Common Stock in payment or
partial payment of a dividend on Preferred Stock pursuant to an effective
registration statement:

     

    (A) in the
case of any Certificated Preferred Stock or Certificated Common Stock, the
Company and the Transfer Agent shall permit the holder thereof to exchange such
Preferred Stock or Certificated Common Stock for Certificated Preferred Stock or
Certificated Common Stock, as the case may be, that does not bear a restrictive
legend and rescind any restriction on the transfer of such Preferred Stock or
Common Stock issuable in respect of the conversion of the Preferred
Stock;

     

    (B) in the
case of any Common Stock issued in payment or partial payment of a dividend on
Preferred Stock pursuant to an effective registration statement, the
Certificated Common Stock issued in respect thereof shall not bear a restrictive
legend; and

     

    (C) in the
case of any Global Preferred Stock, such Preferred Stock shall not be required
to bear the legend set forth in paragraph (c)(vii) above but shall continue
to be subject to the provisions of paragraph (c)(iv)  hereof; provided, however, that with
respect to any request for an exchange of Preferred Stock that is represented by
Global Preferred Stock for Certificated Preferred Stock that does not bear the
legend set forth in paragraph (c)(vii) above in connection with a sale or
transfer thereof pursuant to Rule 144 or another exemption from
registration under the Securities Act (and based upon an Opinion of Counsel if
the Company so requests), the Holder thereof shall certify in writing to the
Transfer Agent that such request is being made pursuant to such exemption (such
certification to be substantially in the form of Exhibit C
hereto).

     

    (x) No
Obligation of the Transfer Agent.

     

    (1) The
Transfer Agent shall have no responsibility or obligation to any beneficial
owner of  Global Preferred Stock, a member of, or a participant in DTC
or any other Person with respect to the accuracy of the records of DTC or its
nominee or of any participant or member thereof, with respect to any ownership
interest in the Preferred Stock or with respect to the delivery to any
participant, member, beneficial owner or other Person (other than DTC) of any
notice or the payment of any amount, under or with respect to such Global
Preferred Stock.  All notices and communications to be given to the
Holders and all payments to be made to Holders under the Preferred Stock shall
be given or made only to the Holders (which shall be DTC or its nominee in the
case of the Global Preferred Stock).  The rights of beneficial owners
in any Global Preferred Stock shall be exercised only through DTC subject to the
applicable rules and procedures of DTC.  The Transfer Agent may rely
and shall be fully protected in relying upon information furnished by DTC with
respect to its members, participants and any beneficial owners.

     

    (2) The
Transfer Agent shall have no obligation or duty to monitor, determine or inquire
as to compliance with any restrictions on transfer imposed under this
Certificate of Designation or under applicable law with respect to any transfer
of any interest in any Preferred Stock (including any transfers between or among
DTC participants, members or beneficial owners in any Global Preferred Stock)
other than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Certificate of Designation, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.

     

    (d) Replacement
Certificates.  If a mutilated Preferred Stock certificate is
surrendered to the Transfer Agent or if the Holder of a Preferred Stock
certificate claims that the Preferred Stock certificate has been lost, destroyed
or wrongfully taken, the Company shall issue and the Transfer Agent shall
countersign a replacement Preferred Stock certificate if the reasonable
requirements of the Transfer Agent and of Section 8-405 of the Uniform
Commercial Code as in effect in the State of Oklahoma are met.  If
required by the Transfer Agent or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Transfer Agent
to protect the Company and the Transfer Agent from any loss which either of them
may suffer if a Preferred Stock certificate is replaced.  The Company
and the Transfer Agent may charge the Holder for their expenses in replacing a
Preferred Stock certificate.

     

    (e) Temporary
Certificates.  Until definitive Preferred Stock certificates
are ready for delivery, the Company may prepare and the Transfer Agent shall
countersign temporary Preferred Stock certificates.  Temporary
Preferred Stock certificates shall be substantially in the form of definitive
Preferred Stock certificates but may have variations that the Company considers
appropriate for temporary Preferred Stock certificates.  Without
unreasonable delay, the Company shall prepare and the Transfer Agent shall
countersign definitive Preferred Stock certificates and deliver them in exchange
for temporary Preferred Stock certificates.

     

    (f) Cancelation.  (i) In
the event the Company shall purchase or otherwise acquire Certificated Preferred
Stock, the same shall thereupon be delivered to the Transfer Agent for
cancelation.

     

    (ii) At such
time as all beneficial interests in Global Preferred Stock have either been
exchanged for Certificated Preferred Stock, converted, repurchased or canceled,
such Global Preferred Stock shall thereupon be delivered to the Transfer Agent
for cancelation.

     

    (iii) The
Transfer Agent and no one else shall cancel and destroy all Preferred Stock
certificates surrendered for transfer, exchange, replacement or cancelation and
deliver a certificate of such destruction to the Company unless the Company
directs the Transfer Agent to deliver canceled Preferred Stock certificates to
the Company.  The Company may not issue new Preferred Stock
certificates to replace Preferred Stock certificates to the extent they evidence
Preferred Stock which the Company has purchased or otherwise
acquired.

     

    12. Additional Rights of
Holders.  In addition to the rights provided to Holders under
this Certificate of Designation, Holders shall have the rights set forth in the
Registration Rights Agreement.

     

    13. Other
Provisions.

     

    (a) 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.

     

    (b) 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.

     

    (c) The
shares of Preferred Stock shall be issuable only in whole shares.

     

    (d) All
notice periods referred to herein shall commence on the date of the mailing of
the applicable notice.

     

    

      

    

      
         1 Subject to removal upon registration
under the Securities Act of 1933 or otherwise when the security shall no longer
be a Transfer Restricted Security.

       

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, the Company has caused this certificate to be signed and
attested this 7th day of November, 2005.

     

    
      
        	 	CHESAPEAKE ENERGY
      CORPORATION	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Martha
      A. Burger	 
	 	 	Martha
      A. Burger	 
	 	 	Treasurer
      & Senior Vice President - Human Resources	 
	 	 	 	 


      

    

     

    
      
        	 	 
	 	 	 
	
                Attest:

              	/s/
      Jennifer M. Grigsby 	 
	 	Jennifer
      M. Grigsby	 
	 	Corporate
      Secretary	 
	 	 	 


      



     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
A

     

    FORM OF
PREFERRED STOCK

     

    FACE OF
SECURITY

     

    [THIS
SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES
ACT”), AND THIS SECURITY AND ANY SECURITY ISSUABLE UPON CONVERSION HEREOF MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.

     

    THE
HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
SECURITY AND ANY SECURITY ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) OUTSIDE OF THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THE SECURITIES
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT.]1

     

    [UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.]2

     

    [TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE CERTIFICATE OF DESIGNATION
REFERRED TO BELOW.]2

     

    IN
CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE
TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.

     

    
      

    

    1 Subject
to removal upon registration under the Securities Act of 1933 or otherwise when
the security shall no longer be a Transfer Restricted Security.

      
      2 Subject
to removal if not a global security.

    


    
      
        
          


           

        

         


      

      
         


        
          

        

      

      
         


      

    


    


     

    Certificate
Number Number of Shares of

    Convertible
Preferred Stock

    [         ]

    


    CUSIP
NO.:  165167834

     

    5.00%
Cumulative Convertible Preferred Stock (Series 2005B) (par value
$0.01)

     

    (liquidation
preference $100 per share of Convertible Preferred Stock)

     

    of

     

    Chesapeake
Energy Corporation

     

    Chesapeake
Energy Corporation, an Oklahoma corporation (the “Company”), hereby certifies
that [___________] (the “Holder”) is the registered owner of [___________] fully
paid and non-assessable preferred securities of the Company designated the 5.00%
Cumulative Convertible Preferred Stock (Series 2005B) (par value $0.01)
(liquidation preference $100 per share of Preferred Stock) (the “Preferred
Stock”).  The shares of Preferred Stock are transferable on the books
and records of the Transfer Agent, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer.  The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Stock represented
hereby are issued and shall in all respects be subject to the provisions of the
Certificate of Designation dated November 7, 2005, as the same may be
amended from time to time (the “Certificate of
Designation”).  Capitalized terms used herein but not defined shall
have the meaning given them in the Certificate of Designation.  The
Company will provide a copy of the Certificate of Designation to a Holder
without charge upon written request to the Company at its principal place of
business.

     

    Reference
is hereby made to select provisions of the Preferred Stock set forth on the
reverse hereof, and to the Certificate of Designation, which select provisions
and the Certificate of Designation shall for all purposes have the same effect
as if set forth at this place.

     

    Upon
receipt of this certificate, the Holder is bound by the Certificate of
Designation and is entitled to the benefits thereunder.

     

    Unless
the Transfer Agent’s Certificate of Authentication hereon has been properly
executed, these shares of Preferred Stock shall not be entitled to any benefit
under the Certificate of Designation or be valid or obligatory for any
purpose.

     


    
      
        
          


           

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, the Company has executed this certificate this __th day of
___________, _____.

     

    CHESAPEAKE
ENERGY CORPORATION

    


    


    By:           

    Name:

    Title:

    


    


    By:           

    Name:

    Title:

    



    
      
        
          


           

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    TRANSFER
AGENT’S CERTIFICATE OF AUTHENTICATION

     

    These are
shares of the Preferred Stock referred to in the within-mentioned Certificate of
Designation.

     

    Dated:

     

    UMB BANK,
N.A., as Transfer Agent,

    


    


    By:           

    Authorized Signatory

    



    
      
        
          


           

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    REVERSE
OF SECURITY

     

    Dividends
on each share of Preferred Stock shall be payable at a rate per annum set forth
in the face hereof or as provided in the Certificate of
Designation.

     

    The
shares of Preferred Stock shall be convertible into the Company’s Common Stock
in the manner and according to the terms set forth in the Certificate of
Designation.

     

    The
Company will furnish without charge to each holder who so requests the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock and the qualifications, limitations or
restrictions of such preferences and/or rights.

     

    


     


    
      
        
          


           

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    ASSIGNMENT

     

    FOR VALUE
RECEIVED, the undersigned assigns and transfers the shares of Preferred Stock
evidenced hereby
to:  _______________________________________________

     

    ______________________________________________________________________________

     

    ____________________________________________________________________________________________________________________________________________________________

     

    (Insert
assignee’s social security or tax identification number)

     

    ____________________________________________________________________________________________________________________________________________________________

     

    ______________________________________________________________________________

     

    (Insert
address and zip code of assignee)

     

    and
irrevocably
appoints:_________________________________________________________

     

    ______________________________________________________________________________

     

    ______________________________________________________________________________

     

    ______________________________________________________________________________

     

    agent to
transfer the shares of Preferred Stock evidenced hereby on the books of the
Transfer Agent.  The agent may substitute another to act for him or
her.

     

    Date:  ___________________

     

    Signature:  _____________________________

     

    (Sign
exactly as your name appears on the other side of this Preferred Stock
Certificate)

     

    Signature
Guarantee:3 ____________________

     

    


     

    

      

    

      
      3           (Signature
must be guaranteed by an "eligible guarantor institution" that is a bank,
stockbroker, savings and loan association or credit union meeting the
requirements of the Transfer Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Transfer
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)

    


    
      
        
          


           

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
B

     

    NOTICE OF
CONVERSION

     

    (To be
Executed by the Holder

     

    in order
to Convert the Preferred Stock)

     

    The
undersigned hereby irrevocably elects to convert (the “Conversion”) shares of
5.00% Cumulative Convertible Preferred Stock (Series 2005B) (the “Preferred
Stock”), represented by stock certificate
No(s).             (the
“Preferred Stock Certificates”) into shares of common stock (“Common Stock”) of
Chesapeake Energy Corporation (the “Company”) according to the conditions of the
Certificate of Designation of the Preferred Stock (the “Certificate of
Designation”), as of the date written below.  If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto and is delivering herewith
the Preferred Stock Certificates.  No fee will be charged to the
holder for any conversion, except for transfer taxes, if any.  A copy
of each Preferred Stock Certificate is attached hereto (or evidence of loss,
theft or destruction thereof).

     

    The
undersigned represents and warrants that all offers and sales by the undersigned
of the shares of Common Stock issuable to the undersigned upon conversion of the
Preferred Stock shall be made pursuant to registration of the Common Stock under
the Securities Act of 1933 (the “Act”), or pursuant to any exemption from
registration under the Act.

     

    Any
holder, upon the exercise of its conversion rights in accordance with the terms
of the Certificate of Designation and the Preferred Stock, agrees to be bound by
the terms of the Registration Rights Agreement.

     

    Capitalized
terms used but not defined herein shall have the meanings ascribed thereto in or
pursuant to the Certificate of Designation.

     

    Date of
Conversion:                                                                                                           

     

    Applicable
Conversion
Price:                                                                                                           

     

    Number of
shares of Preferred Stock to be
Converted:                                                                                                                                

     

    Number of
shares of Common Stock to be Issued:
*                                                                                                                                

     

    Signature:                                                                                                           

     

    Name:                                                                                                           

     

    Address:**                                                                                                           

     

    Fax
No.:                                                                                                

     

    *The
Company is not required to issue shares of Common Stock until the original
Preferred Stock Certificate(s) (or evidence of loss, theft or destruction
thereof) to be converted are received by the Company or its Transfer
Agent.  The Company shall issue and deliver shares of Common Stock to
an overnight courier not later than three business days following receipt of the
original Preferred Stock Certificate(s) to be converted.

     

    **Address
where shares of Common Stock and any other payments or certificates shall be
sent by the Company.

     


    
      
        
          


        

         


      

      
         


        
          

        

      

      
         


      

    


    EXHIBIT
C

     

    CERTIFICATE
TO BE DELIVERED UPON EXCHANGE OR

     

    REGISTRATION
OF TRANSFER OF PREFERRED STOCK

     

    
      	
              Re:

            	
              5.00%
      Cumulative Convertible Preferred Stock (Series 2005B) (the “Preferred
      Stock”) of Chesapeake Energy Corporation (the
  “Company”)

            


    

     

    This
Certificate relates to ____ shares of Preferred Stock held in ⁪*/ book-entry or
⁪*/ definitive form by _______________ (the “Transferor”).

     

    The
Transferor*:

     

    
      	
                

            	
              has
      requested the Transfer Agent by written order to deliver in exchange for
      its beneficial interest in the Preferred Stock held by the Depository
      shares of Preferred Stock in definitive, registered form equal to its
      beneficial interest in such Preferred Stock (or the portion thereof
      indicated above); or

            


    

     

    
      	
                

            	
              has
      requested the Transfer Agent by written order to exchange or register the
      transfer of Preferred Stock.

            


    

     

    In
connection with such request and in respect of such Preferred Stock, the
Transferor does hereby certify that the Transferor is familiar with the
Certificate of Designation relating to the above-captioned Preferred Stock and
that the transfer of this Preferred Stock does not require registration under
the Securities Act of 1933 (the “Securities Act”) because */:

     

    
      	
                

            	
              Such
      Preferred Stock is being acquired for the Transferor’s own account without
      transfer.

            


    

     

    
      	
                

            	
              Such
      Preferred Stock is being transferred to the
  Company.

            


    

     

    
      	
                

            	
              Such
      Preferred Stock is being transferred to a qualified institutional buyer
      (as defined in Rule 144A under the Securities Act), in reliance on
      Rule 144A.

            


    

     

    
      	
                

            	
              Such
      Preferred Stock is being transferred in reliance on and in compliance with
      another exemption from the registration requirements of the Securities Act
      (and based on an Opinion of Counsel if the Company so
      requests).

            


    

     

    


    [INSERT
NAME OF TRANSFEROR]

    


    


    by:                 

    


    Date:                                           

     

    */           Please
check applicable box.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    CERTIFICATE
OF ELIMINATION

     

    Chesapeake
Energy Corporation (the “Corporation”), a corporation organized and existing
under the Oklahoma General Corporation Act,

     

    DOES
HEREBY CERTIFY:

     

    FIRST:  That the
Corporation has acquired 1,020,000 shares of its 5.0% Cumulative Convertible
Preferred Stock (Series 2005B), par value $.01 per share (the “Acquired
Shares”).

     

    SECOND:  That the
Board of Directors of the Corporation has adopted resolutions retiring the
Acquired Shares.

     

    THIRD:  That the
Certificate of Designation for the 5.0% Cumulative Convertible Preferred Stock
(Series 2005B) (the “Certificate of Designation”) prohibits the reissuance of
shares when so retired and, pursuant to the provisions of Section 1078 of the
Oklahoma General Corporation Act, upon the date of the filing of this
Certificate of Elimination, the Certificate of Designation shall be amended so
as to reduce the number of authorized shares of the 5.0% Cumulative Convertible
Preferred Stock (Series 2005B) by 1,020,000 shares, being the total number of
the Acquired Shares retired by the Board of Directors. Accordingly, the number
of authorized but undesignated shares of preferred stock of the Company shall be
increased by 1,020,000 shares. The retired Acquired Shares have a par value of
$.01 per share and an aggregate par value of $10,200.00.

     

    IN WITNESS WHEREOF, the
Corporation has caused this Certificate to be executed by its Senior Vice
President, Treasurer and Corporate Secretary, and attested to by its Assistant
Secretary, this 17th day of
April, 2008.

     

    
      
        	 	CHESAPEAKE ENERGY
      CORPORATION	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ 
      Jennifer M. Grigsby	 
	 	 	Jennifer
      M. Grigsby	 
	 	 	Senior
      Vice President, Treasurer and Corporate Secretary	 
	 	 	 	 


      

    

     

    
      
        	ATTEST:	 
	 	 	 
	
                By:
      

              	/s/ Anita
      L. Brodrick	 
	 	Anita
      L. Brodrick	 
	 	Assistant
      Secretary	 
	 	 	 


      

    

    
    

     

     

    
      
        
          


          


        

         


      

      
         


        
          

        

      

      
         


      

    


     

    CERTIFICATE
OF ELIMINATION

     

    Chesapeake
Energy Corporation (the “Corporation”), a corporation organized and existing
under the Oklahoma General Corporation Act,

     

    DOES
HEREBY CERTIFY:

     

    FIRST:  That the
Corporation has acquired 669,300 shares of its 5.0% Cumulative Convertible
Preferred Stock (Series 2005B), par value $.01 per share (the “Acquired
Shares”).

     

    SECOND:  That the
Board of Directors of the Corporation has adopted resolutions retiring the
Acquired Shares.

     

    THIRD:  That the
Certificate of Designation for the 5.0% Cumulative Convertible Preferred Stock
(Series 2005B) (the “Certificate of Designation”) prohibits the reissuance of
shares when so retired and, pursuant to the provisions of Section 1078 of the
Oklahoma General Corporation Act, upon the date of the filing of this
Certificate of Elimination, the Certificate of Designation shall be amended so
as to reduce the number of authorized shares of the 5.0% Cumulative Convertible
Preferred Stock (Series 2005B) by 669,300 shares, being the total number of the
Acquired Shares retired by the Board of Directors. Accordingly, the number of
authorized but undesignated shares of preferred stock of the Company shall be
increased by 669,300 shares. The retired Acquired Shares have a par value of
$.01 per share and an aggregate par value of $6,693.00.

     

    IN WITNESS WHEREOF, the
Corporation has caused this Certificate to be executed by its Senior Vice
President, Treasurer and Corporate Secretary, and attested to by its Assistant
Secretary, this 12th day of
May, 2008.

     

    
       

      
        
          	 	CHESAPEAKE ENERGY
      CORPORATION	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ 
      Jennifer M. Grigsby	 
	 	 	Jennifer
      M. Grigsby	 
	 	 	Senior
      Vice President, Treasurer and Corporate Secretary	 
	 	 	 	 


        

      

       

      
        
          	ATTEST:	 
	 	 	 
	
                  By:
      

                	/s/ Anita
      L. Brodrick	 
	 	Anita
      L. Brodrick	 
	 	Assistant
      Secretary	 
	 	 	 


        

      

      
      

       

    


    
      
        
          


           

          


        

         


      

      
         


        
          

        

      

      
         


      

    


     

    CERTIFICATE
OF ELIMINATION

     

    Chesapeake
Energy Corporation (the “Corporation”), a corporation organized and existing
under the Oklahoma General Corporation Act,

     

    DOES
HEREBY CERTIFY:

     

    FIRST:  That the
Corporation has acquired 703,700 shares of its 5.0% Cumulative Convertible
Preferred Stock (Series 2005B), par value $.01 per share (the “Acquired
Shares”).

     

    SECOND:  That the
Board of Directors of the Corporation has adopted resolutions retiring the
Acquired Shares.

     

    THIRD:  That the
Certificate of Designation for the 5.0% Cumulative Convertible Preferred Stock
(Series 2005B) (the “Certificate of Designation”) prohibits the reissuance of
shares when so retired and, pursuant to the provisions of Section 1078 of the
Oklahoma General Corporation Act, upon the date of the filing of this
Certificate of Elimination, the Certificate of Designation shall be amended so
as to reduce the number of authorized shares of the 5.0% Cumulative Convertible
Preferred Stock (Series 2005B) by 703,700 shares, being the total number of the
Acquired Shares retired by the Board of Directors. Accordingly, the number of
authorized but undesignated shares of preferred stock of the Company shall be
increased by 703,700 shares. The retired Acquired Shares have a par value of
$.01 per share and an aggregate par value of $7,037.00.

     

    IN WITNESS WHEREOF, the
Corporation has caused this Certificate to be executed by its Senior Vice
President, Treasurer and Corporate Secretary, and attested to by its Assistant
Secretary, this 29th day of
May, 2008.

     

    
       

      
        
          	 	CHESAPEAKE ENERGY
      CORPORATION	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ 
      Jennifer M. Grigsby	 
	 	 	Jennifer
      M. Grigsby	 
	 	 	Senior
      Vice President, Treasurer and Corporate Secretary	 
	 	 	 	 


        

      

       

      
        
          	ATTEST:	 
	 	 	 
	
                  By:
      

                	/s/ Anita
      L. Brodrick	 
	 	Anita
      L. Brodrick	 
	 	Assistant
      Secretary	 
	 	 	 


        

      

      
      

       

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    CERTIFICATE
OF ELIMINATION

     

    Chesapeake
Energy Corporation (the “Corporation”), a corporation organized and existing
under the Oklahoma General Corporation Act,

     

    DOES
HEREBY CERTIFY:

     

    FIRST:  That the
Corporation has acquired 325,500 shares of its 5.0% Cumulative Convertible
Preferred Stock (Series 2005B), par value $.01 per share (the “Acquired
Shares”).

     

    SECOND:  That the
Board of Directors of the Corporation has adopted resolutions retiring the
Acquired Shares.

     

    THIRD:  That the
Certificate of Designation for the 5.0% Cumulative Convertible Preferred Stock
(Series 2005B) (the “Certificate of Designation”) prohibits the reissuance of
shares when so retired and, pursuant to the provisions of Section 1078 of the
Oklahoma General Corporation Act, upon the date of the filing of this
Certificate of Elimination, the Certificate of Designation shall be amended so
as to reduce the number of authorized shares of the 5.0% Cumulative Convertible
Preferred Stock (Series 2005B) by 325,500 shares, being the total number of the
Acquired Shares retired by the Board of Directors. Accordingly, the number of
authorized but undesignated shares of preferred stock of the Company shall be
increased by 325,500 shares. The retired Acquired Shares have a par value of
$.01 per share and an aggregate par value of $3,255.00.

     

    IN WITNESS WHEREOF, the
Corporation has caused this Certificate to be executed by its Senior Vice
President, Treasurer and Corporate Secretary, and attested to by its Assistant
Secretary, this 4th day of
June, 2008.

     

    
       

      
        
          	 	CHESAPEAKE ENERGY
      CORPORATION	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ 
      Jennifer M. Grigsby	 
	 	 	Jennifer
      M. Grigsby	 
	 	 	Senior
      Vice President, Treasurer and Corporate Secretary	 
	 	 	 	 


        

      

       

      
        
          	ATTEST:	 
	 	 	 
	
                  By:
      

                	/s/ Anita
      L. Brodrick	 
	 	Anita
      L. Brodrick	 
	 	Assistant
      Secretary