Certificate of Designation Of

by Gothic Energy Llc
February 6th, 1998

 
                                                                    EXHIBIT 10.3

                         CERTIFICATE OF DESIGNATION OF
                           PREFERENCES AND RIGHTS OF
                  SENIOR REDEEMABLE PREFERRED STOCK, SERIES A
                           (par value $.05 per share)

                                       OF

                           GOTHIC ENERGY CORPORATION

                              ____________________

                        Pursuant to Section 1032G of the
                        Oklahoma General Corporation Act

                              ____________________


          GOTHIC ENERGY CORPORATION, a corporation organized and existing under
the Oklahoma General Corporation Act (the "Corporation"), does hereby certify
that, pursuant to authority conferred upon the Board of Directors by the
Certificate of Incorporation of the Corporation, and pursuant to the provisions
of Section 1032G of the Oklahoma General Corporation Act, said Board of
Directors duly adopted a resolution on January 22, 1998, which approved the
filing of this Certificate of Designation and which resolution remains in full
force and effect as of the date hereof.

          Pursuant to such resolution and the authority conferred upon the Board
of Directors by the Certificate of Incorporation of the Corporation, there is
hereby created a series of preferred stock of the Corporation, which series
shall have the following powers, preferences, and relative, participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereof, in addition to those set forth in the Certificate of
Incorporation of the Corporation:

          1.  Certain Definitions.  As used herein, the following terms shall
              -------------------                                            
have the following meanings (with terms defined in the singular having
comparable meanings when used in the plural and vice versa), unless the context
otherwise requires:

          "Agent Member" has the meaning specified in Section 16.

          "Business Day" means a day that is not a Saturday, a Sunday or a day
on which banking institutions in the State of New York are not required to be
open.

 
          "Change of Control" shall have the meaning provided in the Indenture
as in effect on the date hereof.

          "Common Stock" of any Person means all Capital Stock of such Person
that is generally entitled to (i) vote in the election of directors of such
Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or others
that will control the management and policies of such Person.

          "Corporation" means Gothic Energy Corporation, an Oklahoma
corporation.

          "Depositary" has the meaning specified in Section 16.

          "Dividend Payment Date" means April 1, July 1, October 1 and January
1, commencing April 1, 1998, unless such day is not a Business Day, in which
case the Dividend Payment Date shall be the immediately succeeding Business Day.

          "Dividend Rate" has the meaning specified in Section 3 hereof.

          "Dividend Record Date" means a day fifteen (15) days preceding the
Dividend Payment Date.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "Global Series A Preferred Stock" has the meaning specified in Section
16 hereof.

          "Holder" means a registered holder of shares of Series A Preferred
Stock.

          "Indenture" means the Indenture dated as of September 9, 1997 between
the Corporation, certain Guarantors and The Bank of New York, as Trustee,
relating to the Notes, attached hereto as Exhibit A.

          "Liquidation Preference" means $1,000 per share of Series A Preferred
Stock plus, for purposes of Section 8 hereof, whether such share is issued or
accrued, in each case, accrued and unpaid dividends, whether or not declared, if
any, thereon through the date such Liquidation Preference is paid.

          "Notes" means the securities that are issued under the Indenture and
called the 12 1/4% Senior Subordinated Notes due 2004.

                                       2

 
          "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
other legal entity.

          "Physical Series A Preferred Stock" has the meaning specified in
Section 16 hereof.

          "Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.

          "Redemption Date" when used with respect to any shares of Series A
Preferred Stock means the date fixed for such redemption of such shares of
Series A Preferred Stock pursuant to Section 6 hereof.

          "Redemption Notice" has the meaning specified in Section 6(C) hereof.

          "Required Filing Date" has the meaning specified in Section 7(A)
hereof.

          "SEC" means the United States Securities and Exchange Commission as
constituted from time to time or any successor performing substantially the same
functions.

          "Securities Act" means the Securities Act of 1933, as amended.

          "Series A Preferred Stock" means the Senior Redeemable Preferred
Stock, Series A, par value $.05 per share, of the Corporation.

          2.  Designation.  The series of preferred stock established hereby
              -----------                                                   
shall be designated the "Senior Redeemable Preferred Stock, Series A" (and shall
be referred to herein as the `Series A Preferred Stock") and the authorized
number of shares of Series A Preferred Stock shall be 90,000 shares.

          3.  Dividends.  On and prior to April 1, 1998, Holders will be
              ---------                                                 
entitled to receive, when, as and if declared by the Board of Directors, out of
funds legally available therefor, dividends payable at a rate per annum (the
'Dividend Rate') of 14% of the aggregate Liquidation Preference of the Series A
Preferred Stock payable in additional shares of Series A Preferred Stock having
an aggregate Liquidation Preference equal to the amount of such dividends due on
any Dividend Payment Date.  In addition, after April 1, 1998, the Dividend Rate
on each share of Series A Preferred Stock will increase, for each 90-day period
that the Series A Preferred Stock remains outstanding, by 1% per annum;
                                                                       
provided, however, that at no
- --------  -------                                                        

                                       3

 
time will the dividend rate on the Series A Preferred Stock exceed 20.00%,
excluding increases in Dividend Rates or any penalty resulting from the exercise
of various options by the Corporation referred to herein and a failure to comply
with the Preferred Stock Registration Rights Agreement dated as of January 22,
1998. Dividends will be cumulative and will accrue from the date of issuance and
be payable quarterly in arrears as provided in the immediately preceding
sentence on each Dividend Payment Date, commencing on April 1, 1998. Dividends,
whether or not declared, will cumulate until declared and paid, when declaration
and payment may be for all or part of the then-accumulated dividends. Each
dividend shall be payable to Holders of record as they appear on the stock books
of the Corporation on each Dividend Record Date. Accrued and unpaid dividends,
if any, shall not bear interest; provided, however, that accrued and unpaid
                                 --------  -------
dividends payable in Series A Stock will accrue dividends from the relevant
Dividend Payment Date and be payable quarterly to the same extent as issued
shares of Series A Preferred Stock. Dividends shall cease to accrue in respect
of the Series A Preferred Stock on any Redemption Date with respect to Series A
Preferred Stock redeemed on any such date.

          4.  Ranking.  The Series A Preferred Stock shall, with respect to
              -------                                                      
dividend rights and rights on liquidation, winding-up and dissolution, rank
senior to all classes of Common Stock of the Corporation and to any other class
or series of any class of Preferred Stock of the Corporation, whether now
outstanding or issued hereafter.  The Corporation shall not create any class or
series of Preferred Stock ranking pari passu with or senior to the Series A
                                  ----------                               
Preferred Stock with respect to dividends rights and rights on liquidation,
winding-up and dissolution without the approval of Holders of a majority of the
outstanding shares of Series A Preferred Stock.

          5.   Voting Rights.
               ------------- 

          (A) Except as required by the Oklahoma General Corporation Act or as
set forth herein, the Holders shall not be entitled to vote on any matter
submitted to a vote of stockholders of the Corporation.  On any matters on which
the Holders shall be so entitled to vote, they shall be entitled to one vote for
each share held.

          (B) In the event any Series A Preferred Stock remains outstanding on
and subsequent to September 30, 1998, then during the period commencing with the
occurrence of such a circumstance and ending with the time when no Series A
Preferred Stock is outstanding (the "Voting Period"), the Holders, voting as a
class, shall be entitled to elect two members of the board of directors of the
Corporation if any Series A Preferred Stock remains outstanding on September 30,
1998, three members of the Board of Directors if any Series A Preferred Stock
remains outstanding on December 31, 1998 and four members of the Board of
Directors if any

                                       4

 
Series A Preferred Stock remains outstanding on March 31, 1999, as provided in
Sections 5(C) and 5(D).

          (C) During the Voting Period, the number of directors constituting the
Board of Directors shall, on the applicable dates, without further action, be
increased by the number of members of the Board of Directors which the Holders
are entitled to elect and the Holders shall have, in addition to the other
voting rights set forth herein or otherwise provided by law, the exclusive
right, voting separately as a class (the "Class"), to elect such number of
directors, the remaining directors to be elected by the other series or classes
of stock entitled to vote therefor, at each meeting of stockholders held for the
purpose of electing directors.  If at the time of any such election the Board of
Directors shall be divided into two or more classes, the director or directors
elected by the Class shall be allocated as evenly as possible among such classes
and shall, subject to Section 5(F), serve for the term of office of the relevant
class.

          (D) The voting right of the holders may be exercised, with respect to
each increase in the Board, initially at a special meeting called pursuant to
this Section 5(D) (and subsequently, pursuant to Section 5(F)) or at an annual
meeting and, thereafter, at annual meetings of the stockholders. At any time
during the Voting Period, a proper officer of the Corporation shall, upon the
written request of Holders of record of 25% of the shares of Series A Preferred
Stock then outstanding, addressed to the Secretary of the Corporation, call a
special meeting of the Holders for the purpose of electing two or more directors
as provided in Section 5(B). 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 Corporation or, if
none, at a place designated by the Secretary of the Corporation. If such meeting
shall not be called by the proper officers of the Corporation within 30 days
after the personal service of such written request upon the Secretary of the
Corporation, or within 30 days after mailing the same within the United States,
by registered mail, addressed to the Secretary of the Corporation at its
principal office, then the Holders of record of 25% of the shares of Series A
Preferred Stock then outstanding may designate in writing a Holder to call such
meeting at the expense of the Corporation, and such meeting may be called by
such person so designated upon the notice required for annual meetings of
stockholders and shall be held at the same place as is elsewhere provided in
this Section 5(D). Any Holder shall have access to the stock books of the
Corporation for the purpose of causing a meeting of Holders to be called
pursuant to the provisions of this Section 5(D). Notwithstanding the other
provisions of this Section 5(D), however, no such special meeting shall be
called within 60 days before the date fixed by the Board of Directors for the
next annual meeting of stockholders or, if no such date has been so fixed, the
date for such meeting provided for in the Corporation's By-Laws.

          (E) At any meeting held for the purpose of electing directors at which
the Holders shall have the right to elect directors as provided herein, the
presence in person or by

                                       5

 
proxy of the holders of Series A Preferred Stock entitled, pursuant to Section
5(B), to cast at least 33-1/3% of the votes entitled to be cast by the Holders
of outstanding shares of Series A Preferred Stock and shall be required and be
sufficient to constitute a quorum of the Class for the election of one or more
directors by the Class. At any such meeting or adjournment thereof (i) the
absence of a quorum of the Holders shall not prevent the election of directors
other than directors to be elected by the Holders and the absence of a quorum or
quorums of the holders of capital stock entitled to elect other directors shall
not prevent the election of the directors to be elected by the Holders, and (ii)
in the absence of a quorum of the holders of any class of stock entitled to vote
for the election of directors, the holders of a majority of the shares of such
class present in person or by proxy shall have the power to adjourn the meeting
for the election of directors which the holders of such class are entitled to
elect, from time to time without notice (except as required by law) other than
announcement at the meeting, until a quorum shall be present.

          (F) Each director elected by the Holders shall continue in office
until his or her successor shall have been elected by the Holders or until the
termination of the Voting Period.

          Any director elected by the Holders who dies, resigns or otherwise
ceases to be a director shall be replaced by the remaining director or
directors, if any, elected by the Holders or in any other manner in which such
director could have been elected in accordance with this Section 5.  Upon
termination of the Voting Period, the Holders shall be automatically divested of
all voting power vested in them under this Section 5.  Upon termination of the
Voting Period, the term of each director elected pursuant to the provisions of
this Section 5 shall in all events thereupon expire (whether or not such term
shall have otherwise expired under the Corporation's Certificate of
Incorporation or By-Laws) and the number of directors constituting the Board of
Directors shall, without further action, be reduced by such number of directors
elected pursuant to Section 5(C).

          6.   Redemption.
               ---------- 

          (A) Optional Redemption.  The Series A Preferred Stock may be redeemed
              -------------------                                               
(subject to contractual and other restrictions with respect thereto and the
legal availability of funds therefor) at the option of the Corporation in whole
or, from time to time, in part, in the manner provided in Section 6(C) hereof at
any time at 101 % of the Liquidation Preference of the Series A Preferred Stock
so redeemed, payable in cash, plus accrued and unpaid dividends (whether or not
declared), which shall also be paid in cash to the Redemption Date; provided,
                                                                    -------- 
that, at any time there is a Change of Control and the Corporation does not
exercise its option to redeem the Series A Preferred Stock in whole pursuant to
this Section 6(A), the Dividend Rate then in effect shall be increased to 18%
per annum for the period that the Corporation shall not

                                       6

 
exercise such redemption option; provided, further, that, at any time the
                                 --------  -------
Corporation consummates a public or private sale of common equity, preferred
equity, subordinated notes or senior subordinated notes, and the Corporation
does not use the proceeds from such sale, after the payment of expenses, to
redeem Series A Preferred Stock pursuant to this Section 6A, the Dividend Rate
then in effect shall be increased to 18% per annum for the period that the
Corporation shall not exercise such redemption option.

          (B)  Mandatory Redemption.  The Corporation shall be obligated to
               --------------------                                        
redeem all outstanding shares of Series A Preferred Stock on December 31, 2004
at a redemption price equal to the Liquidation Preference thereof, payable in
cash, plus accrued and unpaid dividends (whether or not declared), which shall
also be paid in cash (whether or not otherwise payable in cash) to the
Redemption Date.

          (C)  Procedure for Redemption.
               ------------------------ 

          (i)  In the event of a redemption of less than all of the Series A
Preferred Stock, the shares so redeemed will be determined by the Corporation
pro rata according to the number of shares held by each Holder.
- --- ----                                                       

          (ii) The Corporation shall send a written notice of redemption (the
"Redemption Notice") by first-class mail, postage prepaid, not fewer than
fifteen (15) days nor more than sixty (60) days prior to the applicable
Redemption Date to each Holder as of the record date fixed for such redemption
of Series A Preferred Stock at such Holder's address as the same appears on the
stock books of the Corporation; provided, however, that no failure to give such
                                -----------------                              
notice to any Holder or Holders nor any deficiency therein shall affect the
validity of the procedure for the redemption of any shares of Series A Preferred
Stock to be redeemed except as to the Holder or Holders to whom the Corporation
has failed to give said notice or except as to the Holder or Holders whose
notice was defective.  The Redemption Notice shall state:

          (A)  whether all or less than all the outstanding shares of Series A
     Preferred Stock are to be redeemed and the total number of shares of Series
     A Preferred Stock being redeemed;

          (B)  the number of shares of Series A Preferred Stock held of record
     by that specific Holder that the Corporation intends to redeem;

          (C)  the applicable Redemption Date;

                                       7

 
          (D)    the manner and place or places at which payment for the shares
     called for redemption will, upon presentation and surrender to the
     Corporation of the Series A Preferred Stock Certificates evidencing the
     shares being redeemed, be made; and
          (E)    that dividends on the shares of Series A Preferred Stock being
     redeemed shall cease to accrue on the applicable Redemption Date.

          (iii)  On the applicable Redemption Date, the full applicable
redemption price shall become payable for the shares of Series A Preferred Stock
being redeemed on the applicable Redemption Date.  As a condition of payment of
the applicable redemption price, each Holder of Series A Preferred Stock must
surrender a Series A Preferred Stock Certificate or Certificates representing
the shares of Series A Preferred Stock being redeemed by the Corporation in the
manner and at the place designated in the applicable Redemption Notice.  The
full applicable redemption price for such shares properly tendered for payment
shall be paid to the person whose name appears on such certificate or
certificates as the owner thereof, on and after the applicable Redemption Date
when and as certificates for the shares being redeemed are properly tendered for
payment.  Each surrendered Series A Preferred Stock Certificate shall be
cancelled and retired.  In the event that less than all of the shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares.

          (iv)   On the applicable Redemption Date, unless the Corporation
defaults in the payment of the applicable redemption price, dividends will cease
to accrue with respect to the shares of Series A Preferred Stock called for
redemption.  All rights of Holders of such redeemed shares will terminate except
for the right to receive the applicable redemption price.

          7.     Covenants.
                 --------- 

          (A)    SEC Reports.
                 ----------- 

          So long as any of the Series A Preferred Stock remains outstanding,
whether or not the Corporation is subject to Section 13(a) or 15(d) of the
Exchange Act, the Corporation shall file with the SEC, to the extent permitted,
the annual reports, quarterly reports and other documents which the Corporation
would have been required to file with the SEC pursuant to such Sections 13(a)
and 15(d) if the Corporation were so subject, such documents to be filed with
the SEC on or prior to the respective dates (the `Required Filing Dates') by
which the Corporation would have been required so to file such documents if the
Corporation were so subject.  The Corporation shall also in any event (x) within
15 days of each Required Filing Date transmit by mail to all Holders, as their
names and addresses appear on the stock books of the Corporation, without cost
to such Holders copies of the annual reports, quarterly reports and other
documents which the Corporation would have been required to file with the SEC
pursuant to Sections 13(a) and 15(d) of the Exchange Act if the Corporation were
subject to such Sections

                                       8

 
and (y) if filing such documents by the Corporation with the SEC is not
permitted under the Exchange Act, promptly upon written request supply copies of
such documents to any Holder.

          (B)    Additional Covenants.
                 -------------------- 

          (i)    The Corporation will not amend or waive, or solicit the consent
of any person in connection with the amendment or waiver of any provision of
Sections 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.18 and 5.01 of the
Indenture or any related definitions (the "Covenants") without the prior written
consent of the holders of a majority of the aggregate Liquidation Preference of
the Series A Preferred Stock.

          (ii)   The Corporation will not redeem the Notes in whole without (a)
the prior written consent of the holders of a majority of the aggregate
Liquidation Preference of the Series A Preferred Stock or (b) entering into a
written agreement with the holders of the Series A Preferred Stock that provides
substantially the same benefits and protections that the Covenants afforded the
holders of the Notes.

          (iii)  The Corporation will not permit an Event of Default (as defined
in the Indenture) to occur under the Indenture; provided that in the event an
                                                --------                     
Event of Default (as defined in the Indenture) occurs, the Dividend Rate then in
effect shall be increased to a rate per annum of 18% for the period during the
continuation of such Event of Default (as defined in the Indenture).

          8.     Payment on Liquidation.
                 ---------------------- 

          (A)    Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation, Holders of Series A Preferred Stock will be
entitled to receive an amount in cash equal to the Liquidation Preference,
before any distribution is made on any Common Stock or other Preferred Stock of
the Corporation.  After payment of the full amount of the Liquidation
Preferences to which they are entitled, Holders of Series A Preferred Stock will
not be entitled to any further participation in any distribution of assets of
the Corporation.

          (B)    For the purposes of this Section 8, neither the voluntary sale,
 conveyance, exchange or transfer (for cash, shares of stock, securities or
 other consideration) of all or substantially all the property or assets of the
 Corporation nor the consolidation or merger of the Corporation with one or more
 corporations shall be deemed a voluntary or involuntary liquidation,
 dissolution or winding-up of the Corporation, unless such sale, conveyance,
 exchange or transfer shall be in connection with a dissolution or winding-up of
 the business of the Corporation.

                                       9

 
          9.  Exclusion of Other Rights.  Except as may otherwise be required by
              -------------------------                                         
 the Oklahoma General Corporation Act, shares of the Series A Preferred Stock
 shall not have any preferences or relative, participating, optional or other
 special rights, other than those specifically set forth in this Certificate of
 Designation (as such Certificate may be amended from time to time) and in the
 Corporation's Certificate of Incorporation, as amended.  No shares of Series A
 Preferred Stock shall have any preemptive or subscription rights whatsoever as
 to any securities of the Corporation.

          10.  Reissuance of Preferred Stock.  Shares of Series A Preferred
               -----------------------------                               
 Stock that have been issued and reacquired by the Corporation in any manner,
 including shares purchased or redeemed, shall (upon compliance with any
 applicable provisions of the Oklahoma General Corporation Act) have the status
 of authorized and unissued shares of preferred stock undesignated as to series
 and may be redesignated and reissued as part of any series of preferred stock.

          11.  Business Day.  If any payment or redemption shall be required by
               ------------                                                    
 the terms hereof to be made on a day that is not a Business Day, such payment,
 redemption or exchange shall be made on the immediately succeeding Business
 Day.

          12.  Headings of Subdivisions.  The headings of the various
               ------------------------                              
 subdivisions hereof are for convenience of reference only and shall not affect
 the interpretation of any of the provisions hereof.

          13.  Severability of Provisions.  If any right, preference or
               --------------------------                              
limitation of the Series A Preferred Stock set forth in this Certificate of
Designation (as may be amended from time to time) is invalid, unlawful or
incapable of being enforced by reason of any rule or law or public policy, all
other rights, preferences and limitations set forth in this Certificate of
Designation (as so amended) which can be given effect without the invalid,
unlawful or unenforceable right, preference or limitation shall, nevertheless,
remain in full force and effect, and no right, preference or limitation herein
set forth shall be deemed dependent upon any other such right, preference or
limitation unless so expressed herein.

          14.  Notice.  All notices and other communications provided for or
               ------                                                       
permitted to be given to the Corporation hereunder shall be made by hand
delivery, next day air courier or certified first-class mail to the Corporation
at its principal executive offices (currently located at 5727 South Lewis
Avenue, Suite 700, Tulsa Oklahoma 74105).

          15.  Amendments.  This Certificate of Designation may be amended
               ----------                                                 
without notice to or the consent of any Holder to cure any ambiguity, defect or
inconsistency provided that such amendment does not adversely affect the rights
of any Holder.  Any provisions of this

                                       10

 
Certificate of Designation may be amended by the Corporation, or waived by the
Holders, in each case with the written consent of Holders representing a
majority of the outstanding shares of Series A Preferred Stock.

          16.  Book-Entry Provisions for Series A Preferred Stock. (a) Series A
               --------------------------------------------------              
Preferred Stock registered in global form ("Global Series A Preferred Stock")
will (i) be registered in the name of The Depository Trust Company (the
"Depositary") or the nominee of such Depositary, (ii) be delivered to the
Trustee as custodian for such Depositary and (iii) bear customary legends as
required by the Depositary.

          Members of, or participants in, the Depositary ("Agent Members") shall
have no rights hereunder with respect to any Global Series A Preferred Stock
held on their behalf by the Depositary or its custodian, or under the Global
Series A Preferred Stock, and the Depositary may be treated by the Corporation
and any agent of the Corporation as the absolute owner of the Global Series A
Preferred Stock for all purposes whatsoever.  Notwithstanding the foregoing,
nothing herein shall prevent the Corporation or any agent of the Corporation
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Series A Preferred Stock.

          (b) Transfers of Global Series A Preferred Stock shall be limited to
transfer in whole, but not in part, to the Depositary, its successors or their
respective nominees.  Interests of beneficial owners in the Global Series A
Preferred Stock may be transferred or exchanged for physical Series A Preferred
Stock (the "Physical Series A Preferred Stock") in accordance with the rules and
procedures of the Depositary.  In addition, Physical Series A Preferred Stock
shall be transferred to all beneficial owners in exchange for their beneficial
interests in Global Series A Preferred Stock if the Depositary notifies the
Corporation that it is unwilling or unable to continue as Depositary for any
Global Series A Preferred Stock and a successor depositary is not appointed by
the Corporation within 90 days of such notice.

          (c) In connection with any transfer or exchange of a portion of the
beneficial interest in any Global Series A Preferred Stock to beneficial owners
pursuant to paragraph (b), the Corporation shall (if one or more Physical Series
A Preferred Stock Certificates are to be issued) reflect on its books and
records the date and a decrease in the amount of shares of the Global Series A
Preferred Stock in an amount equal to the amount of shares of the beneficial
interest in the Global Series A Preferred Stock to be transferred, and the
Corporation shall execute one or more Physical Series A Preferred Stock
Certificates of like tenor and amount.

          (d) In connection with the transfer of Global Series A Preferred Stock
as an entirety to beneficial owners pursuant to paragraph (b), the Global Series
A Preferred Stock shall be deemed to be surrendered to the Corporation for
cancellation, and the Corporation shall

                                       11

 
execute and deliver to each beneficial owner identified by the Depositary in
writing in exchange for its beneficial interest in the Global Series A Preferred
Stock an equal aggregate amount of shares of Physical Series A Preferred Stock
of authorized denominations.

          (e) Any Physical Series A Preferred Stock delivered in exchange for an
interest in Global Series A Preferred Stock pursuant to paragraph (b), (c) or
(d) shall, except as otherwise provided herein, bear an appropriate legend, if
required.

          (f) The Holder of any Global Series A Preferred Stock may grant
proxies and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take hereunder.

          (g) Notwithstanding anything to the contrary herein, all transfers of
interests in Global Series A Preferred Stock must be made to a `qualified
institutional buyer' as such term is defined in Rule 144A promulgated under the
Securities Act.

          The Corporation will, so long as any shares of Series A Preferred
Stock are outstanding, maintain an office or agency where such shares may be
presented for registration or transfer and where such shares may be presented
for redemption.

         IN WITNESS WHEREOF, Gothic Energy Corporation has caused this
Certificate of Designation of Preferences and Rights of its Series A Preferred
Stock to be signed and attested by its duly authorized officers, this 23d day of
January, 1998.


                              GOTHIC ENERGY CORPORATION



                              By: /s/ Michael Paulk
                                  -----------------
                                  Name: Michael Paulk
                                  Title: President


                              ATTEST:



                              By: /s/  John Rainwater
                                  -------------------
                                  Name: John Rainwater
                                  Title: Secretary

                                       12