Chesapeake Energy 1996 Annual Report Download - page 59

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RELATED PARTY TRANSACTIONS
Certain directors, shareholders and employees of the
company have acquired working interests in certain of
the company's oil and gas properties. The owners of such
working interests are required to pay their proportionate
share of all costs. As of June 30, 1996, 1995 and 1994
the company had accounts receivable for these costs of
$2.9 million, $4.4 million and $1.7 million, respectively.
During fiscal 1996, 1995 and 1994, the company in-
curred legal expenses of $347,000, $516,000 and
$631,000, respectively, for legal services provided by the
law firm of which a director is a member.
EMPLOYEE BENEFIT PLANS
Effective October 1, 1989, the company established a
401(K) profit sharing plan. On December 1, 1993, the
company amended the plan and established the Chesa-
peake Energy Savings and Incentive Plan. On January 1,
1996 the company amended the plan and established
the Chesapeake Energy Corporation Savings and Incen-
tive Stock Bonus Plan (the "Savings and Incentive Stock
Bonus Plan"). Eligible employees may make voluntary
contributions to the Savings and Incentive Stock Bonus
Plan which are matched by the company up to 10% of
the employees' annual salary with the company's com-
mon stock. The amount of employee contributions is lim-
ited as specified in the Savings and Incentive Stock Bo-
nus Plan. The company may, at its discretion, make ad-
ditional contributions to the Savings and Incentive Stock
Bonus Plan. The company contributed $187,000,
$95,000 and $70,000 to the Savings and Incentive Stock
Bonus Plan during the fiscal years ended June 30, 1996,
1995 and 1994, respectively.
CHESAPEAKE EN51CORPORATION
MAJOR CUSTOMERS
Sales to individual customers constituting 10% or
more of total oil and gas sales were as follows:
Management believes that the loss of any of the above
customers would not have a material impact on the
company's results of operations or its financial position.
STOCKHOLDERS' EQUITY
On April 9, 1996, the company completed a public
offering of 2,475,000 shares of Common Stock at a price
of $35.33 per share, resulting in net proceeds (after of-
fering costs) to the company of approximately $82.1
million. On April 12, 1996, the underwriters exercised
an over-allotment option to purchase an additional
519,750 shares of Common Stock at a price of $35.33
per share, resulting in additional net proceeds (after of-
fering costs) to the company of approximately $17.3
million. The net proceeds from the offering were used to
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year Amount
Percent of
oil and
gas sales
($ in thousands)
1996 Aquila Southwest
Pipeline
Corporation $41,900 38%
GPM Gas Corporation $28,700 26%
Wickford Energy
Marketing, L.C. $18,500 17%
1995 Aquila Southwest
Pipeline
Corporation $18,548 33%
Wickford Energy
Marketing, L.C. $15,704 28%
GPM Gas
Corporation $11,686 21%
1994 Wickford Energy
Marketing, L.C. $ 6,190 28%
GPM Gas Corporation $ 6,105 27%
Plains Marketing and
Transportation, Inc. $ 2,659 12%
Texaco Exploration &
Production, Inc. $ 2,249 10%