Chesapeake Energy 1996 Annual Report Download - page 60

fund a portion of the company's exploration and devel-
opment capital expenditures and fot general cotporate
purposes.
On Match 31, 1994, the company issued 12% Senior
Notes and Warrants for 2,190,937 shares of the company's
Common Stock (see Note 2). The Warrants were valued
at $3.04 million and are recorded as Common Stock War-
rants and paid-in capital on the accompanying consoli-
dated balance sheets. A portion of the 12% Senior Notes
and Warrants were issued to Trust Company of the West
in exchange for preferred stock, warrants to purchase
Common Stock and an overriding royalty interest.
A 1.8-for-i stock split of the Common Stock injanu-
ary 1993, a 2-for-i stock split of the Common Stock in
December 1994, and 3-for-2 stock splits of the Com-
mon Stock in December 1995 and June 1996 have been
given retroactive effect in these financial statements.
Stock Option Plans
Under the company's 1992 Incentive Stock Option
Plan (the "ISO Plan"), options to purchase Common
Stock may be granted only to employees of the company
and its subsidiaries. Subject to any adjustment as pro-
vided by the ISO Plan, the aggregate number of shares
which may be issued and sold may not exceed 1,881,000
shares. The maximum period for exercise of an option
may not be more than ten years (or five years for an op-
tionee who owns more than 10% of the Common Stock)
from the date of grant, and the exercise price may not be
less than the fair market value of the shares underlying
the options on the date of grant (or 110% of such value
for an optionee who owns more than 10% of the Com-
mon Stock). Options granted become exercisable at dates
determined by the Stock Option Committee of the Board
of Directors. No options may be granted under the ISO
Plan after December 16, 1994.
Under the company's 1992 Nonstatutory Stock Op-
tion Plan (the "NSO Plan"), non-qualified options to
purchase Common Stock may be granted only to direc-
tors and consultants of the company. Subject to any ad-
justment as provided by the NSO Plan, the aggregate
number of shares which may be issued and sold may not
exceed 1,566,000 shares. The maximum period for exer-
cise of an option may not be more than ten yeats from
the date of grant, and the exercise price may not be less
than the fair market value of the shares underlying the
options on the date of grant. Options granted become
CHESAPEAKE ENERGY CORPORATION
exercisable at dates determined by the Stock Option
Committee of the Board of Directors. No options may
be granted under the NSO Plan after December 10, 2002.
Under the company's 1994 Stock Option Plan (the
"1994 Plan"), incentive and nonqualified stock options
to purchase Common Stock may be granted to employ-
ees of the company and its subsidiaries. Subject to any
adjustment as provided by the 1994 Plan, the aggregate
number of shares which may be issued and sold may not
exceed 2,443,455 shares. The maximum period for exer-
cise of an option may not be more than ten years from
the date of grant, and the exercise price may not be less
than the fair market value of the shares underlying the
options on the date of grant. Options granted become
exercisable at dates determined by the Stock Option
Committee of the Board of Directors. No options may
be granted under the 1994 Plan after December 16,2004.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The exercise of certain stock options results in state
and federal income tax benefits to the company related
to the difference between the market price of the Com-
mon Stock at the date of disposition (or sale) and the
option price. During fiscal 1996 and 1995, $7,950,000
and $1,229,000 was recorded as an adjustment to addi-
tional paid-in capital and deferred income taxes with re-
spect to such tax benefits.
#Of Options Option
Prices
Options outstanding at
June 30, 1993 885,780 $ 1.11-5 2.67
Options granted 1,640,250 $ 1.11s 1.71
Options exercised
Options terminated (9,360) s 1.11$ 1.33
Options outstanding at
June 30, 1994 2,516,670 $ 1.11$ 2.67
Options granted 1,592,775 $ 4.50 5 9.84
Options exercised (644,366) $ 1.11$ 2.67
Options terminated (50,783) s 1.11$ 4.50
Options outstanding at
June 30, 1995 3,414,296 s 1.11s 9.84
Options granted 1,213,425 511.33$35.33
Options exercised (787,023) 5 1.11$35.33
Options terminated (39,256) $ 1.11$11.33
Options outstanding at
June 30, 1996 3,801,442 5 1.11$35.33