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 <P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P>
<P STYLE="line-height:3.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000">&nbsp;</P> <P STYLE="margin-top:4pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>UNITED STATES </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>SECURITIES AND EXCHANGE COMMISSION </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>WASHINGTON, DC 20549</B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:18pt; font-family:Times New Roman" ALIGN="center"><B>FORM <FONT
STYLE="white-space:nowrap">8-K</FONT></B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>CURRENT
REPORT </B></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Pursuant to Section&nbsp;13 or 15(d) </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>of the Securities Exchange Act of 1934 </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:12pt; font-family:Times New Roman" ALIGN="center"><B>Date of report (Date of earliest event reported): February&nbsp;11, 2019 (February 8, 2019) </B></P>
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<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:24pt; font-family:Times New Roman" ALIGN="center"><B>PetroQuest Energy, Inc. </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>(Exact Name of Registrant as Specified in Charter)</B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top" ALIGN="center"><B>Delaware</B></TD>
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<TD VALIGN="top" ALIGN="center"><B><FONT STYLE="white-space:nowrap">001-32681</FONT></B></TD>
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<TD VALIGN="top" ALIGN="center"><B><FONT STYLE="white-space:nowrap">72-1440714</FONT></B></TD></TR>
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<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(State or Other Jurisdiction</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>of Incorporation)</B></P></TD>
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<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(Commission</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>File Number)</B></P></TD>
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<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>(I.R.S. Employer</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>Identification No.)</B></P></TD></TR>
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<TD VALIGN="top" COLSPAN="3" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>400 E. Kaliste Saloom Rd., Suite 6000</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Lafayette, Louisiana</B></P></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center"><B>70508</B></TD></TR>
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<TD VALIGN="top" COLSPAN="3" ALIGN="center"><B>(Address of Principal Executive Offices)</B></TD>
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<TD VALIGN="top" ALIGN="center"><B>(Zip Code)</B></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>Registrant&#146;s Telephone Number, Including Area Code: (337)
<FONT STYLE="white-space:nowrap">232-7028</FONT> </B></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><center>
<P STYLE="line-height:6.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1.00pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Check the appropriate box below
if the Form <FONT STYLE="white-space:nowrap">8-K</FONT> filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (<I>see</I> General Instruction A.2. below): </P>
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </P></TD></TR></TABLE>
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<TD WIDTH="4%">&nbsp;</TD>
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">Soliciting material pursuant to Rule <FONT STYLE="white-space:nowrap">14a-12</FONT> under the Exchange Act (17
CFR <FONT STYLE="white-space:nowrap">240.14a-12)</FONT> </P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><FONT STYLE="white-space:nowrap">Pre-commencement</FONT> communication pursuant to Rule <FONT
STYLE="white-space:nowrap">14d-2(b)</FONT> under the Exchange Act (17 CFR <FONT STYLE="white-space:nowrap">240.14d-2(b))</FONT> </P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><FONT STYLE="white-space:nowrap">Pre-commencement</FONT> communication pursuant to Rule <FONT
STYLE="white-space:nowrap">13e-4(c)</FONT> under the Exchange Act (17 CFR <FONT STYLE="white-space:nowrap">240.13e-4(c))</FONT> </P></TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR &#167;230.405) or
Rule <FONT STYLE="white-space:nowrap">12b-2</FONT> of the Securities Exchange Act of 1934 (17 CFR <FONT STYLE="white-space:nowrap">&#167;240.12b-2).</FONT> </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Emerging growth company&nbsp;&nbsp;&#9744; </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section&nbsp;13(a) of the Exchange
Act.&nbsp;&nbsp;&#9744; </P> <P STYLE="font-size:10pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P> <P STYLE="line-height:1.0pt;margin-top:0pt;margin-bottom:0pt;border-bottom:1px solid #000000">&nbsp;</P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>EXPLANATORY NOTE </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">As previously reported by PetroQuest Energy, Inc. (&#147;PetroQuest,&#148; the &#147;Company,&#148; &#147;we,&#148; &#147;our,&#148; and
&#147;us&#148;) on November&nbsp;6, 2018 (the &#147;Petition Date&#148;), the Company, PetroQuest Energy, L.L.C. (&#147;PQE&#148;) and certain of our other wholly-owned direct and indirect subsidiaries (collectively, the &#147;Debtors&#148;) filed
voluntary petitions seeking relief under Chapter 11 of Title 11 of the United States Code (the &#147;Bankruptcy Code&#148;) in the United States Bankruptcy Court for Southern District of Texas (the &#147;Court&#148;) to pursue a Chapter 11 plan of
reorganization under the caption In re <I>PetroQuest Energy Inc., et. al</I> (Case <FONT STYLE="white-space:nowrap">No.&nbsp;18-36322)</FONT> (the &#147;Chapter 11 Cases&#148;). </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On January&nbsp;31, 2019, the Court entered an order (the &#147;Confirmation Order&#148;) confirming the Debtors&#146; First Amended Chapter
11 Plan of Reorganization, as Immaterially Modified as of January&nbsp;28, 2019 (as amended, modified or supplemented from time to time, the &#147;Plan&#148;) under Chapter 11 of the Bankruptcy Code. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On February&nbsp;8, 2019 (the &#147;Effective Date&#148;), the Plan became effective in accordance with its terms and the Debtors emerged from
the Chapter 11 Cases. The descriptions of the Plan and the Confirmation Order in this Current Report on Form <FONT STYLE="white-space:nowrap">8-K</FONT> are qualified in their entirety by reference to the full text of the Plan and the Confirmation
Order, which are filed herewith as Exhibit 2.1 and Exhibit 99.1, respectively, and incorporated herein by reference. </P> <P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="10%" VALIGN="top" ALIGN="left"><B>Item&nbsp;1.01</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Entry Into a Material Definitive Agreement. </B></P></TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Exit Facility </I></B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective
Date, pursuant to the terms of the Plan and the Confirmation Order, PQE, as borrower, and the Company, as parent, entered into the Term Loan Agreement (the &#147;Exit Facility&#148;) with the lenders party thereto (which were lenders under the
Company&#146;s Multidraw Term Loan Agreement (as defined below) and certain holders of the Company&#146;s Old Notes (as defined below) that subscribed to be a lender pursuant to the syndication process) and Wells Fargo Bank, National Association, as
administrative agent. The Exit Facility provides for a $50.0&nbsp;million term loan facility. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The proceeds of the Exit Facility were used
to repay in full the loans and other obligations under the Company&#146;s Multidraw Term Loan Agreement. The maturity date of the Exit Facility is November&nbsp;8, 2023. The interest rate per annum is equal to (i)&nbsp;in the case of LIBOR Loans (as
defined in the Exit Facility), 7.50% per annum and (ii)&nbsp;in the case of Base Rate Loans (as defined in the Exit Facility), 6.50% per annum. The Exit Facility is secured by a first priority lien on substantially all of the assets of the Company
and certain of its subsidiaries. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Company and its subsidiaries are subject to a restrictive covenant under the Exit Facility,
consisting of maintaining a ratio of (i)&nbsp;the present value, discounted at 10% per annum, of the estimated future net revenues in respect of the Company&#146;s and its subsidiaries&#146; oil and gas properties, before any state, federal, foreign
or other income taxes, attributable to total proved reserves, using strip prices then in effect at the end of each calendar quarter, including swap agreements in place at the end of each quarter, to (ii)&nbsp;the sum of the aggregate outstanding
principal amount of the term loans to be less than 1.50 to 1.00 as measured on the last day of each calendar. If the Company fails to maintain the ratio, the Company may either (i)&nbsp;prepay the outstanding term loans such that after giving effect
to such prepayment, the financial covenant is met or (ii)&nbsp;be in default under the Exit Facility, in which case the term loans and all other amounts owed pursuant to the Exit Facility would become immediately due and payable. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Exit Facility also contains customary affirmative and negative covenants, including as to compliance with laws (including environmental
laws, ERISA and anti-corruption laws), maintenance of required insurance, delivery of quarterly and annual financial statements, maintenance and operation of property (including oil and gas properties), restrictions on the incurrence of liens and
indebtedness, entering into mergers, consolidations and sales of assets, and transactions with affiliates and other customary covenants. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Exit Facility contains customary events of default and remedies for credit facilities of this nature. If the Company, PQE or any
subsidiary does not comply with the financial and other covenants in the Exit Facility, the lenders may, subject to customary cure rights, require immediate payment of all amounts outstanding under the Exit Facility. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">2 </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The foregoing description of the Exit Facility is qualified in its entirety by reference to
the full text of the Exit Facility, which is filed herewith as Exhibit 10.1 and incorporated herein by reference. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>2024 PIK Notes </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective Date, pursuant to the terms of the Plan and the Confirmation Order, the Company entered into an indenture (the
&#147;Indenture&#148;) by and among the Company, PQE, as guarantor (the &#147;Guarantor&#148;), and Wilmington Trust, National Association, as trustee (the &#147;Trustee&#148;) and collateral agent, and issued $80.0&nbsp;million of the
Company&#146;s 10% Senior Secured PIK Notes due 2024 (the &#147;2024 PIK Notes&#148;) pursuant thereto. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">Interest on the 2024 PIK Notes
accrues at a rate of 10% per annum payable semi-annually in kind (&#147;PIK Interest&#148;) on February&nbsp;15 and August&nbsp;15 of each year, beginning on August&nbsp;15, 2019. At the election of the Board of Directors of the Company (the
&#147;Board&#148;), so long as the Company has provided notice to the holders of the 2024 PIK Notes and the Trustee of such election at least 30 days prior to any applicable interest payment date, interest on the 2024 PIK Notes for any interest
period may instead be payable at the annual rate (i)&nbsp;solely in cash (the &#147;Cash Interest&#148;) or (ii)&nbsp;partially as Cash Interest and partially as PIK Interest. The maturity date of the 2024 Notes is February&nbsp;15, 2024. The 2024
PIK Notes are secured on a second priority lien basis by the equity of PQE that also secures the Exit Facility. Pursuant to the terms of the Intercreditor Agreement (as defined below), the security interest in those assets that secure the 2024 PIK
Notes and the related guarantee will be contractually subordinated to liens thereon that secure the Exit Facility and certain other permitted obligations as set forth in the Indenture. Consequently, the 2024 PIK Notes and the related guarantee will
be effectively subordinated to the Exit Facility and such other permitted obligations to the extent of the value of such assets. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The
Company may, at its option, on any one or more occasions redeem all or a portion of the 2024 PIK Notes issued under the Indenture at the redemption prices set forth below (expressed in percentages of principal amount on the redemption date),
<U>plus</U> accrued and unpaid Cash Interest together with an amount of cash equal to all accrued and unpaid PIK Interest on the 2024 PIK Notes to be redeemed to, but not including, the redemption date (subject to the right of holders of the 2024
PIK Notes of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the periods set forth below: </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="bottom" NOWRAP> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; border-bottom:1.00pt solid #000000; display:table-cell; font-size:8pt; font-family:Times New Roman; "><B>Period</B></P></TD>
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<TD VALIGN="bottom" COLSPAN="2" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"><B>Redemption<BR>Price</B></TD>
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<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">February&nbsp;8, 2019 to February&nbsp;7, 2020</P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="right">102.000</TD>
<TD NOWRAP VALIGN="bottom">%&nbsp;</TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">February&nbsp;8, 2020 to February&nbsp;7, 2021</P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="right">101.000</TD>
<TD NOWRAP VALIGN="bottom">%&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff" STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">February&nbsp;8, 2021 and thereafter</P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="right">100.000</TD>
<TD NOWRAP VALIGN="bottom">%&nbsp;</TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">Upon the occurrence of certain change of control events, any holder of the 2024 PIK Notes will have the right
to cause the Company to repurchase all or any part of such holder&#146;s 2024 PIK Notes at a repurchase price payable in cash equal to 101% of the principal amount of the 2024 PIK Notes to be repurchased (including any PIK Notes (as defined in the
Indenture) or any increase in principal amount of the 2024 PIK Notes in connection with PIK Interest, plus accrued interest to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on
the related interest payment date). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Indenture contains certain customary events of default, including: (1)&nbsp;default in the
payment of any interest when it becomes due and payable, and continuance of such default for a period of 30 days, (2)&nbsp;default in the payment of principal at maturity, upon optional redemption, upon declaration of acceleration or otherwise or
failure to purchase the 2024 PIK Notes when required pursuant to the Indenture or the 2024 PIK Notes, (3)&nbsp;default in the performance or breach of certain covenants in the Indenture, which default continues uncured for a period of 60 days (or
(x) 30 days in the case of failure to comply with certain restrictive covenants and (y) 120 days in the case of failure to comply with reporting obligations under the Indenture) after (i)&nbsp;the Company receives written notice from the Trustee or
(ii)&nbsp;the Company and the Trustee receive written notice from the holders of not less than 25% in principal amount of the 2024 PIK Notes as provided in the Indenture, (4)&nbsp;certain voluntary or involuntary events of bankruptcy, insolvency or
winding up or liquidation of the Company or the Guarantor, (5)&nbsp;any judgment or decree for the payment of money in excess of $10.0&nbsp;million or its foreign currency equivalent at the time such judgment or decree is entered against the
Company, any subsidiary guarantor under the Indenture or any significant subsidiary under the Indenture, remains outstanding for a period of 60 consecutive days following the entry of such judgment or decree and is not discharged, waived or the
execution thereof stayed and (6)&nbsp;the occurrence of the following: (x)&nbsp;except as permitted by the Note Documents (as </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">3 </P>

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defined in the Indenture), any Note Document establishing the liens securing the notes obligations ceases for any reason to be enforceable; <U>provided</U> that it will not be an event of default
under the Indenture if the sole result of the failure of one or more Note Documents to be fully enforceable is that any lien purported to be granted under such Note Documents on collateral, individually or in the aggregate, having a fair market
value of not more than $15.0&nbsp;million, ceases to be an enforceable and perfected lien; <U>provided</U> <U>further</U>, that if such failure is susceptible to cure, no event of default shall arise with respect thereto until 45 days after any
officer of the Company or any restricted subsidiary becomes aware of such failure, which failure has not been cured during such time period, (y)&nbsp;except as permitted by the Note Documents, any lien purported to be granted under any Note Document
on collateral, individually or in the aggregate, having a fair market value in excess of $15.0&nbsp;million, ceases to be an enforceable and perfected second priority lien, subject to the Intercreditor Agreement and permitted liens <U>provided</U>
that if such failure is susceptible to cure, no event of default shall arise with respect thereto until 45 days after any officer of the Company or any restricted subsidiary under the Indenture becomes aware of such failure, which failure has not
been cured during such time period and (z)&nbsp;the Company or any other grantor under the Indenture, or any person acting on behalf of any of them, denies or disaffirms, in writing, any obligation of the Company or any other grantor under the
Indenture set forth in or arising under any Note Document establishing liens securing the notes obligations. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">If a default occurs and is
continuing and is actually known to a trust officer of the Trustee, the Trustee must send to each holder of the 2024 PIK Notes notice of the default within 90 days after it occurs. Except in the case of defaults in payment involving the payment of
principal of or interest with respect to any 2024 PIK Note, the Trustee may withhold notice if and so long as it in good faith determines that withholding notice is not opposed to the interests of the holders of the 2024 PIK Notes. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The foregoing description of the Indenture is qualified in its entirety by reference to the full text of the Indenture, which is filed
herewith as Exhibit 4.1 and incorporated herein by reference. The foregoing description of the 2024 PIK Notes is qualified in its entirety by reference to the form of 2024 PIK Notes, which is included as Exhibit A to the Indenture and incorporated
herein by reference. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Intercreditor Agreement </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective Date, in accordance with the Plan and the Confirmation Order, Wells Fargo Bank, National Association, as intercreditor agent,
Wilmington Trust, National Association, as collateral agent, the Company and PQE entered into a lien subordination and intercreditor agreement (the &#147;Intercreditor Agreement&#148;) to govern the relationship of holders of the 2024 PIK Notes, the
lenders under the Exit Facility and holders of other priority lien obligations with respect to certain collateral and certain other matters. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The foregoing description of the Intercreditor Agreement is qualified in its entirety by reference to the full text of the Intercreditor
Agreement, which is filed herewith as Exhibit 10.2 and incorporated herein by reference. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Registration Rights Agreement </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective Date, in accordance with the Plan and the Confirmation Order, the Company entered into a registration rights agreement (the
&#147;Registration Rights Agreement&#148;) with certain recipients of shares of the Class&nbsp;A Common Stock, par value $0.01 per share (the &#147;Class&nbsp;A Common Stock&#148;) of the Company and the 2024 PIK Notes distributed on the Effective
Date (collectively, the &#147;Registration Rights Holders&#148;). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Registration Rights Agreement requires the Company to file a shelf
registration statement (the &#147;Initial Shelf Registration Statement&#148;) that includes the Registrable Securities (as defined in the Registration Rights Agreement), whose inclusion has been timely requested and subject to certain limitations,
with the Securities and Exchange Commission (the &#147;SEC&#148;) no later than five business days after the Company files its first Quarterly Report on Form <FONT STYLE="white-space:nowrap">10-Q</FONT> or Annual Report on Form <FONT
STYLE="white-space:nowrap">10-K</FONT> with the SEC after the Effective Date, and use its reasonable best efforts to have the Initial Shelf Registration Statement declared effective as soon as reasonably practicable after the Company files the
Initial Shelf Registration Statement (but in no event later than 75 days after it shall have filed such Shelf Registration Statement, unless it is not practicable to do so due to circumstances directly relating to outstanding comments of the SEC
relating to the Initial Shelf Registration Statement; provided that the Company is using its reasonable best efforts to address any such comments as promptly as possible). The Registration Rights Agreement also provides the Registration Rights
Holders the ability to demand registrations or underwritten shelf takedowns subject to certain requirements and exceptions. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">4 </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">In addition, if the Company proposes to register shares of the Class&nbsp;A Common Stock in
certain circumstances, the Registration Rights Holders will have certain &#147;piggyback&#148; registration rights, subject to restrictions set forth in the Registration Rights Agreement, to include their shares of the Class&nbsp;A Common Stock in
the registration statement. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">These registration rights are subject to certain conditions and limitations, including the right of
underwriters to limit the Registrable Securities to be included in an underwritten offering and the Company&#146;s right to delay or withdraw a registration statement under certain circumstances. The Company will generally pay all registration
expenses in connection with its obligations under the Registration Rights Agreement, regardless of whether a registration statement is filed or becomes effective. The registration rights granted in the Registration Rights Agreement are subject to
customary indemnification and contribution provisions, as well as customary restrictions, such as blackout periods. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Registration
Rights Agreement also provides that (a)&nbsp;for so long as the Company is subject to the requirements to publicly file information or reports with the SEC pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
&#147;Exchange Act&#148;), the Company will timely file all information and reports with the SEC and comply with all such requirements, and (b)&nbsp;if the Company is not subject to the requirements of Section&nbsp;13 or 15(d) of the Exchange Act,
make available information necessary to comply with Section&nbsp;4(a)(7) of the Securities Act of 1933, as amended (the &#147;Securities Act&#148;), and Rule 144 and Rule 144A, if available, with respect to resales of the Registrable Securities
under the Securities Act, at all times, all to the extent required from time to time to enable such Registration Rights Holder to sell Registrable Securities without registration under the Securities Act. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The foregoing description of the Registration Rights Agreement is qualified in its entirety by reference to the full text of the Registration
Rights Agreement, which is filed herewith as Exhibit 4.3 and incorporated herein by reference. </P> <P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><B>Item&nbsp;1.02</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Termination of Material Definitive Agreements </B></P></TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Equity Interests </I></B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective
Date, by operation of the Plan, all agreements, instruments, and other documents evidencing, relating to or connected with any equity interests of the Company, including the Company&#146;s common stock, par value $0.001 (the &#147;Old Common
Stock&#148;) and 6.875% Series B Cumulative Convertible Perpetual Preferred Stock (&#147;Old Preferred Stock&#148;), issued and outstanding immediately prior to the Effective Date, and any rights of any holder in respect thereof, were deemed
cancelled, discharged and of no force or effect. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Debt Securities and Credit Agreement </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective Date, by operation of the Plan, all outstanding obligations under the following notes issued by the Company were cancelled and
the indentures governing such obligations were cancelled: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">10% Second Lien Secured Senior Notes due 2021 (the &#147;2021 Notes&#148;), issued pursuant to that certain
Indenture dated February&nbsp;17, 2016, by and among the Company, as issuer, certain of the Company&#146;s subsidiaries, as guarantors, and Wilmington Trust, N.A., as trustee and collateral trustee; and </P></TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="2%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">10% Second Lien Senior Secured PIK Notes due 2021 (the &#147;2021 PIK Notes&#148; and together with the 2021
Notes, the &#147;Old Notes&#148;), issued pursuant to that certain Indenture dated September&nbsp;27, 2016, by and among the Company, as issuer, certain of the Company&#146;s subsidiaries, as guarantors, and Wilmington Trust, N.A., as trustee.
</P></TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective Date, as provided by the Plan and Confirmation Order, the Multidraw Term Loan Agreement, dated as of
August&nbsp;31, 2018 (the &#147;Multidraw Term Loan Agreement&#148;), by and among PQE, as the borrower, the Company and TDC Energy, LLC, as guarantors, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent,
was fully discharged. The obligations owing to the lenders under the Multidraw Term Loan Agreement were replaced by the obligations under the Exit Facility. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">5 </P>

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<TR style = "page-break-inside:avoid">
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><B>Item&nbsp;2.02</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Results of Operations and Financial Condition. </B></P></TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On February&nbsp;11, 2018, the Company issued a news release reporting 2018 estimated proved oil and gas reserves and production. The news
release is filed herewith as Exhibit 99.2 and incorporated herein by reference. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">In accordance with General Instruction B.2 of Form <FONT
STYLE="white-space:nowrap">8-K,</FONT> the foregoing information, including Exhibit 99.2, shall not be deemed &#147;filed&#148; for the purposes of Section&nbsp;18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor
shall such information and Exhibit 99.2 be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. </P>
<P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><B>Item&nbsp;2.03</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Creation of a Direct Financial Obligation or an Obligation under an
<FONT STYLE="white-space:nowrap">Off-Balance</FONT> Sheet Arrangement of a Registrant </B></P></TD></TR></TABLE> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The information regarding the
Exit Facility and the Indenture set forth in Item 1.01 of this Report is incorporated by reference herein. </P> <P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><B>Item&nbsp;3.02</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Unregistered Sales of Equity Securities </B></P></TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective Date, pursuant to the terms of the Plan, the Company issued 8,900,000 shares of Class&nbsp;A Common Stock pro rata to the
holders of the Old Notes. In addition, pursuant to the terms of the Plan, the Company issued 300,000 shares of Class&nbsp;A Common Stock to certain holders of the Old Notes for their commitment to backstop the Exit Facility. As of the Effective
Date, there were approximately 9.2&nbsp;million shares of Class&nbsp;A Common Stock outstanding. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Plan and Confirmation Order provide
for the exemption of the offer and sale of the 8,900,000 shares of Class&nbsp;A Common Stock from the registration requirements of the Securities Act<B><I> </I></B>pursuant to Section&nbsp;1145(a)(1) of the Bankruptcy Code. The shares of
Class&nbsp;A Common Stock issued to certain holders of the Old Notes for their commitment to backstop the Exit Facility were issued in a private placement transaction in reliance upon an exemption from registration pursuant to Section&nbsp;4(a)(2)
of the Securities Act. </P> <P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><B>Item&nbsp;3.03</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Material Modification to Rights of Security Holders </B></P></TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">As provided in the Plan and the Confirmation Order, all notes, stock, agreements, instruments, certificates, and other documents evidencing any
claim against or interest in the Debtors with respect to securities of the Company were cancelled on the Effective Date and the obligations of the Debtors thereunder or in any way related thereto were fully released. The securities cancelled on the
Effective Date include all of the Old Common Stock, the Old Preferred Stock and the Old Notes. For further information, see Items 1.01, 1.02, 3.02 and 5.01 of this Report, which are incorporated herein by reference. </P>
<P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><B>Item&nbsp;5.01</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Changes in Control of Registrant </B></P></TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">As previously disclosed, on the Effective Date, all previously issued and outstanding shares of the Old Common Stock were cancelled, and the
Company issued shares of Class&nbsp;A Common Stock pro rata to the holders of the Old Notes pursuant to the Plan. For further information, see Items 1.01, 1.02, 3.02, 3.03 and 5.02 of this Report, which are incorporated herein by reference. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">6 </P>

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<TR style = "page-break-inside:avoid">
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><B>Item&nbsp;5.02</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers. </B></P></TD></TR></TABLE> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Departure and Appointment of Directors </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">Pursuant to the Plan and Confirmation Order, as of the Effective Date, the following directors ceased to serve on the Board: J. Gerard Jolly,
W. J. Gordon, III, Charles F. Mitchell, II, M.D., E. Wayne Nordberg and William W. Rucks, IV. Charles T. Goodson, the Company&#146;s President and Chief Executive Officer, remained on the Board. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">Pursuant to the Plan and the Confirmation Order, as of the Effective Date, the Board consists of the following persons: Neil P. Goldman,
Charles T. Goodson, John &#147;Brad&#148; Juneau, Harry Quarls and David I. Rainey. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">As of the filing of this Report, the Board has not
determined any committee assignments. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Employment Agreements </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The executive officers of the Company will remain the same and the Company entered into new employment agreements with the following executive
officers on the Effective Date: Charles Goodson, Chief Executive Officer and President of the Company, J. Bond Clement, the Executive Vice President, Chief Financial Officer and Treasurer of the Company, Arthur M. Mixon, III, the Executive Vice
President &#150; Operations and Production of the Company, Stephen H. Green, Senior Vice President &#150; Exploration of the Company, and Edgar A. Anderson, Vice President of the ArkLaTex Region of the Company. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">Each of the employment agreements has a term of one year with automatic <FONT STYLE="white-space:nowrap">one-year</FONT> renewals unless
either party provides the other with at least 60 days advance written notice of <FONT STYLE="white-space:nowrap">non-renewal.</FONT> In the event the agreement is terminated by us without &#147;cause&#148; or due to the death or
&#147;disability&#148; of the executive, the executive or his estate will receive, subject to certain conditions, severance equal to his annual base salary, payable in equal semi-monthly installments, for 12 months following the date of termination.
In addition, in the event the agreement is terminated by us without &#147;cause&#148;, we will continue, subject to certain conditions, the executive&#146;s health and welfare benefits at our cost for 12 months following the date of termination.
Each agreement prohibits the executive from engaging in various activities outside his employment with the Company without the Company&#146;s approval and prohibits the disclosure of confidential information. In addition, each agreement contains a <FONT
STYLE="white-space:nowrap">non-competition</FONT> agreement and <FONT STYLE="white-space:nowrap">non-solicitation</FONT> restrictions prohibiting the executive from competing with the Company or soliciting its employees, customers or acquisition
prospects during his employment and for one year after termination of the agreement for any reason, subject to certain exceptions. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The
foregoing description of the executive employment agreements is qualified in its entirety by reference to the full text of the form of executive employment agreement entered into with Messrs. Goodson, Clement, Mixon, Green and Anderson, which is
filed herewith as Exhibit 10.3 and incorporated by reference herein. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Termination Agreements </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Company also entered into termination agreements with Messrs. Goodson, Clement, Mixon, Green and Anderson on the Effective Date. The
termination agreements provide for the payment of severance benefits upon certain &#147;change in control&#148; events and subsequent termination of the executive&#146;s employment within two years after such &#147;change in control&#148; by us
other than for &#147;cause&#148; or by the executive for &#147;good reason.&#148; Each of the agreements has an initial term through December&nbsp;31, 2019, with automatic <FONT STYLE="white-space:nowrap">one-year</FONT> renewals beginning on
January&nbsp;1, 2020 and each January&nbsp;1 thereafter unless, not later than September&nbsp;30 of the preceding year, the Company gives notice of the Company&#146;s intent not to extend any of the agreements. Even if the Company timely gives
notice, each of the agreements will automatically be extended for 24 months beyond its term if a &#147;change in control&#148; event occurred during the term of any of the agreements. In the event that an executive&#146;s employment is terminated
after a &#147;change in control&#148; event by us without &#147;cause&#148; or by the executive for &#147;good reason&#148;, the executive will receive, subject to certain conditions, a lump sum severance payment equal to two times the sum of his
annual base salary and most recent annual bonus. In addition, we will continue, subject to certain conditions, the executive&#146;s health and welfare benefits at our cost for 24 months following the date of termination. An executive is not entitled
to any benefits under the agreement if the executive&#146;s employment terminates due to the executive&#146;s retirement at age 65, the executive&#146;s &#147;total and permanent disability&#148; or the
</P>
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executive&#146;s death. The Company is required to reimburse the executives for all legal fees and expenses incurred by them as a result of a termination which entitles them to any payments under
the agreements, including all such fees and expenses incurred in contesting or disputing any notice of termination under the agreements or in seeking to obtain or enforce any right or benefit provided by the agreements or in connection with any tax
audit or proceeding relating to the application of excise taxes to any payment or benefit under the agreements. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The foregoing description
of the termination agreements is qualified in its entirety by reference to the full text of the form of termination agreement entered into with Messrs. Goodson, Clement, Mixon, Green and Anderson, which is filed herewith as Exhibit 10.4 and
incorporated by reference herein. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Indemnification Agreements </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective Date, the Company entered into indemnification agreements with each of its directors and executive officers. The
indemnification agreements require the Company to (i)&nbsp;indemnify these individuals to the fullest extent permitted by the Delaware General Corporation Law, as amended (the &#147;DGCL&#148;), against liabilities that may arise by reason of their
service to the Company, and (ii)&nbsp;advance expenses reasonably incurred as a result of any proceeding against them as to which they could be indemnified. The Company may enter into indemnification agreements with any future directors or executive
officers. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The foregoing description of the indemnification agreements is qualified in its entirety by reference to the full text of the
form of indemnification agreement, which is filed herewith as Exhibit 10.5 and incorporated herein by reference. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Management Incentive Plan
</I></B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective Date, pursuant to the operation of the Plan and Confirmation Order, the 2019 Long Term Incentive Plan (the
&#147;Management Incentive Plan&#148;) became effective. The Management Incentive Plan is an equity-based compensation plan providing for and permitting the grant of awards to eligible participants including, among other things, in the form of
unrestricted shares of Class&nbsp;A Common Stock, stock options to purchase shares of Class&nbsp;A Common Stock and restricted stock units to be settled in shares of Class&nbsp;A Common Stock, in some cases subject to the satisfaction of certain
vesting criteria. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Board will administer the Management Incentive Plan. The Management Incentive Plan provides for a reserve of
1,344,000 shares of Class&nbsp;A Common Stock on the Effective Date. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The awards to be granted under the Management Incentive Plan will be
subject to customary anti-dilution and other adjustments for changes in capitalization and other events. The awards to be granted pursuant to the Management Incentive Plan will be granted by the Board in its discretion. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The foregoing description of the Management Incentive Plan is qualified in its entirety by reference to the full text of the Management
Incentive Plan, which is filed herewith as Exhibit 10.6 and incorporated herein by reference. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>New Award Grants </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective Date and pursuant to the Plan and Confirmation Order, restricted stock units (&#147;RSUs&#148;) were awarded to Messrs.
Goodson, Clement and Mixon pursuant to the Management Incentive Plan as follows: 379,582 RSUs, 126,528 RSUs and 126,528 RSUs, respectively. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The RSUs will be settled in shares of Class&nbsp;A Common Stock within a specified period following vesting. The RSUs are subject to vesting
as follows: </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="9%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">Approximately 41.7% of the RSUs were fully vested upon grant. </P></TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="9%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">Subject to continuing employment on the vesting date, approximately 16.6% of the RSUs will fully vest on the
earlier to occur of (i)&nbsp;the <FONT STYLE="white-space:nowrap">one-year</FONT> anniversary of the Effective Date or (ii)&nbsp;a &#147;Change in Control&#148; (as defined in the participant&#146;s Termination Agreement). In the event of the
termination of a participant&#146;s employment by the Company for any reason (other than for cause) or in the event of the participant&#146;s death or disability, these RSUs will become fully vested. </P></TD></TR></TABLE>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">8 </P>

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<TR style = "page-break-inside:avoid">
<TD WIDTH="9%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">Subject to continuing employment on the vesting date, approximately 41.7% of the RSUs will fully vest on the
earliest to occur of (i)&nbsp;the three-year anniversary of Effective Date (ii)&nbsp;a Change in Control or (iii)&nbsp;the attainment of a <FONT STYLE="white-space:nowrap">20-trading</FONT> day volume-weighted average price of $20.00 following the
date of grant. In the event of the termination of a participant&#146;s employment for any reason (other than death or disability) prior to vesting, these RSUs will be forfeited. </P></TD></TR></TABLE>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective Date and pursuant to the Plan and Confirmation Order, stock options (&#147;Options&#148;) were awarded to Messrs. Goodson,
Clement and Mixon pursuant to the Management Incentive Plan as follows: 189,791 Options, 63,264 Options and 63,264 Options, respectively. One half of the Options granted to each recipient have an exercise price of $10.00 per share and the other half
have an exercise price of $12.50 per share. The Options vest upon the earlier to occur of (i)&nbsp;a <FONT STYLE="white-space:nowrap">20-trading</FONT> day volume-weighted average price of a share of the Class&nbsp;A Common Stock at least equal to
the applicable exercise price following the date of grant or (ii)&nbsp;a &#147;Change in Control&#148; (as defined in the participant&#146;s Termination Agreement). </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The foregoing descriptions of the RSUs and the Options are qualified in their entirety by reference to the full text of the form of Restricted
Stock Units Award Agreement and the form of Stock Option Award Agreement, which are filed herewith as Exhibit 10.7 and Exhibit 10.8, respectively, and incorporated herein by reference. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Certain Relationships and Related Party Transactions </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The transactions described under the heading &#147;Registration Rights Agreement&#148; in Item&nbsp;1.01 of this Current Report on Form <FONT
STYLE="white-space:nowrap">8-K</FONT> and the transactions in connection with the issuances described in Item&nbsp;3.02 of this Current Report on Form <FONT STYLE="white-space:nowrap">8-K</FONT> may be deemed to be related party transactions. As
such, the disclosures contained therein are incorporated into this Item&nbsp;5.02 by reference. </P> <P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="10%" VALIGN="top" ALIGN="left"><B>Item&nbsp;5.03</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. </B></P></TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective Date, pursuant to the terms of the Plan and the Confirmation Order, the Company filed the Amended and Restated Certificate of
Incorporation (the &#147;Certificate of Incorporation&#148;) with the Secretary of State of Delaware. Also on the Effective Date, and pursuant to the terms of the Plan and the Confirmation Order, the Company adopted the Amended and Restated Bylaws
(the &#147;Bylaws&#148;). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Certificate of Incorporation provides that the total number of shares of capital stock that the Company is
authorized to issue is 75,000,000 shares, consisting of (a) 64,999,998 shares of Class&nbsp;A Common Stock, (b)&nbsp;one share of Class&nbsp;B Common Stock, par value $0.01 per share (the &#147;Class&nbsp;B Common Stock&#148;), (c) one share of
Class&nbsp;C Common Stock, par value $0.01 per share (the &#147;Class&nbsp;C Common Stock&#148; and together with the Class&nbsp;A Common Stock and the Class&nbsp;B Common Stock, the &#147;Common Stock&#148;) and (d) 10,000,000 shares of preferred
stock, par value $0.01 per share (the &#147;Preferred Stock&#148;). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The descriptions of the Certificate of Incorporation and the Bylaws
are qualified in their entirety by reference to the full texts of the Certificate of Incorporation and the Bylaws, which are filed herewith as Exhibits 3.1 and 3.2, respectively, and incorporated herein by reference. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Common Stock </I></B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">Holders of the
Common Stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders (except with respect to an election of directors as described below) and do not have cumulative voting rights. Holders of Common Stock are
entitled to receive proportionately any dividends as may be declared by the Board, subject to any preferential dividend rights of any series of Preferred Stock that is outstanding at the time of the dividend. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Certificate of Incorporation provides that the total number of directors constituting the Board shall initially be comprised of five
directors. The directors shall consist of a single class, with an initial term of office to expire at the 2020 annual meeting of the stockholders to take place in 2020 (the &#147;Initial Term&#148;). </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">9 </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective Date, the Class&nbsp;B Holder (as defined in the Certificate of
Incorporation) was issued one share of Class&nbsp;B Common Stock (the &#147;Class&nbsp;B Holder&#148;). The Class&nbsp;B Holder, as the holder of the only outstanding share of Class&nbsp;B Common Stock, has the right to elect two directors. The
initial term of such directors is the Initial Term, and the Class&nbsp;B Holder will continue to have the right to elect two directors for so long as Corre (as defined in the Certificate of Incorporation) holds at least 20% of the then-outstanding
Class&nbsp;A Common Stock (excluding shares of Class&nbsp;A Common Stock issued pursuant to an incentive plan or other incentive arrangement approved by the Board). If Corre holds less than 20% of the then-outstanding Class&nbsp;A Common Stock, the
Class&nbsp;B Holder shall have the right to elect one director for so long as Corre holds at least 10% of the then-outstanding Class&nbsp;A Common Stock (excluding any shares of Class&nbsp;A Common Stock issued pursuant to an incentive plan or other
incentive arrangement approved by the Board). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">On the Effective Date, the Class&nbsp;C Holder (as defined in the Certificate of
Incorporation) was issued one share of Class&nbsp;C Common Stock. The Class&nbsp;C Holder, as the holder of the only outstanding share of Class&nbsp;C Common Stock, has the right to elect two directors. The initial term of such directors is the
Initial Term, and the Class&nbsp;C Holder will continue to have the right to elect two directors for so long as MacKay (as defined in the Certificate of Incorporation) holds at least 20% of the then-outstanding Class&nbsp;A Common Stock (excluding
shares of Class&nbsp;A Common Stock issued pursuant to an incentive plan or other incentive arrangement approved by the Board). If MacKay holds less than 20% of the then-outstanding Class&nbsp;A Common Stock, the Class&nbsp;C Holder shall have the
right to elect one director for so long as MacKay holds at least 10% of the then-outstanding Class&nbsp;A Common Stock (excluding any shares of Class&nbsp;A Common Stock issued pursuant to an incentive plan or other incentive arrangement approved by
the Board). </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">In the event of the Company&#146;s liquidation or dissolution, the holders of Common Stock are entitled to receive
proportionately the Company&#146;s net assets available for distribution to stockholders after payment of all debts and other liabilities and subject to the prior rights of any outstanding Preferred Stock. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">All shares of Common Stock will, when issued, be duly authorized, fully paid and nonassessable. The rights, preferences and privileges of
holders of Common Stock are subject to the rights of the holders of shares of any series of Preferred Stock that the Company may designate and issue in the future. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Common Stock is not entitled to preemptive or other similar subscription rights to purchase any of the Company&#146;s securities. The
Common Stock is not convertible and no redemption or sinking fund provisions are applicable to the Common Stock. Unless the Board determines otherwise, the Company will issue all of its Class&nbsp;A Common Stock in the form of one or more global
certificates to be deposited in the facilities of the Depository Trust Company. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Preferred Stock </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Board has the authority to issue shares of Preferred Stock from time to time on terms it may determine, to divide shares of Preferred Stock
into one or more series and to fix the designations, preferences, privileges and restrictions of Preferred Stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms and the
number of shares constituting any series or the designation of any series to the fullest extent permitted by the DGCL. The issuance of the Preferred Stock could have the effect of decreasing the trading price of the Class&nbsp;A Common Stock,
restricting dividends on the Company&#146;s capital stock, diluting the voting power of the Class&nbsp;A Common Stock, impairing the liquidation rights of the Company&#146;s capital stock, or delaying or preventing a change in control of the
Company. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Restrictions on Transfer </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Certificate of Incorporation provides that, as long as Corre and MacKay beneficially hold, collectively, 33% of the issued and outstanding
shares of Class&nbsp;A Common Stock, if a beneficial holder of Class&nbsp;A Common Stock or group of beneficial holders of Class&nbsp;A Common Stock, collectively comprising at least a majority of the then outstanding shares of Class&nbsp;A Common
Stock (the &#147;Selling Stockholders&#148;), wish to sell shares of Class&nbsp;A Common Stock owned by them and comprising at least a majority of all then outstanding shares of Class&nbsp;A Common Stock (on a fully diluted basis) to any person who
is not an affiliate of the Selling Stockholder (such person, excluding any affiliate of a Selling Stockholder, </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">10 </P>

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a &#147;Third Party Purchaser&#148;) for cash or publicly traded securities or a combination thereof, either in a transfer or in a merger (or similar transaction), other combination,
consolidation, recapitalization or reorganization (a &#147;Drag-Along Sale&#148;), then such Selling Stockholder shall have the right to require the other holders of Class&nbsp;A Common Stock to (x)&nbsp;sell all of their shares of Class&nbsp;A
Common Stock to such Third Party Purchaser in connection with such Drag-Along Sale and otherwise on the same terms of such Selling Stockholders selling such shares of Class&nbsp;A Common Stock and (y)&nbsp;vote in favor thereof and use their best
efforts to cooperate in the Drag-Along Sale as reasonably requested by the Board, including by waiving any appraisal or similar rights with respect to the Drag-Along Sale and executing any action by written consent of the holders of Class&nbsp;A
Common Stock. In addition, the Certificate of Incorporation provides that, as long as Corre and MacKay beneficially hold, collectively, 33% of the issued and outstanding shares of Class&nbsp;A Common Stock, if the Board approves a Change of Control
(as defined in the Certificate of Incorporation) (an &#147;Approved Sale&#148;), then each holder of Class&nbsp;A Common Stock agrees to vote in favor thereof and will use its best efforts to cooperate in the Approved Sale as reasonably requested by
the Board, including by waiving any appraisal or similar rights with respect to the Approved Sale and executing any action or actions by written consent of the holders of Class&nbsp;A Common Stock. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Certificate of Incorporation contains restrictions on the transfer of certain of the Company&#146;s securities (including the Common
Stock) by holders who are, or would become as a result of such transfer, a holder of at least 4.9% of the common stock. In particular, without the approval of the Board, no person or group of persons treated as a single entity under Treasury
Regulation <FONT STYLE="white-space:nowrap">Section&nbsp;1.382-3</FONT> will be permitted to acquire, whether directly, indirectly or constructively, and whether in one transaction or a series of related transactions, any of our Common Stock or any
other instrument treated as stock for purposes of Section&nbsp;382 of the Internal Revenue Code of 1986, as amended (the &#147;Code&#148;), to the extent that after giving effect to such purported acquisition (a)&nbsp;the purported acquirer, or any
other person by reason of the purported acquirer&#146;s acquisition, would become a Substantial Holder (as defined in the Certificate of Incorporation), or (b)&nbsp;the percentage of ownership of our Common Stock by a Tax Person (as defined in the
Certificate of Incorporation) that, prior to giving effect to the purported acquisition, is already a Substantial Holder would be increased. In addition, without the approval of the Board, no Substantial Holder will dispose any of our Common Stock.
Such restrictions were put in place in order to preserve the net operating loss carryforwards, capital loss carryforwards, general business credit carryforwards, alternative minimum tax credit carryforwards and foreign tax credit carryforwards, as
well as any &#147;net unrealized <FONT STYLE="white-space:nowrap">built-in</FONT> loss&#148; within the meaning of Section&nbsp;382 of the Code, of the Company or any direct or indirect subsidiary thereof (collectively, the &#147;Tax
Benefits&#148;). Such restrictions will be in in place from the Effective Date to the earlier to occur of (i)&nbsp;any date after the Effective Date if the Board in good faith determines that it is in the best interests of the Company and its
stockholders for such restrictions to expire, (ii)&nbsp;the beginning of a taxable year of the Company as of which no Tax Benefits are available, (iii)&nbsp;the second anniversary of the Effective Date, (iv)&nbsp;the date selected by the holders of
a majority of the voting power of the Company or (v)&nbsp;the repeal, amendment or modification of Section&nbsp;382 of the Code in such a way as to render the restrictions imposed by Section&nbsp;382 of the Code no longer applicable to the Company.
</P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Anti-takeover Effects of the Certificate of Incorporation and Bylaws </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Certificate of Incorporation and Bylaws contain provisions, including the Restrictions on Transfer described above, that may delay, defer
or discourage another party from acquiring control of the Company. The Company expects that these provisions, including those summarized below, will discourage coercive takeover practices or inadequate takeover bids. These provisions are also
designed to encourage persons seeking to acquire control of the Company to first negotiate with the Board, which the Company believes may result in an improvement of the terms of any such acquisition in favor of the Company&#146;s stockholders.
However, they also give the Board the power to discourage acquisitions that some stockholders may favor. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman"><I>Stockholder Action and
Advance Notice Requirements for Stockholder Proposals </I></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Company&#146;s Certificate of Incorporation provides that stockholders may
take action by written consent if the consent is signed by holders of the Company&#146;s outstanding shares having the number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon
were present and voted. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Bylaws require advance notice procedures for stockholder proposals to be brought before an annual meeting or
special meeting of the stockholders, including the nomination of candidates for election as directors. Stockholders at an annual meeting or special meeting may only consider the proposals specified in the notice of meeting or brought before the
meeting by or at the direction of the Board, or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered a timely written notice in proper form to the Company&#146;s secretary, of
the stockholder&#146;s intention to bring such business before the meeting. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">11 </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman"><I>Authorized but Unissued Shares </I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">Under Delaware law, the Company&#146;s authorized but unissued shares of Class&nbsp;A Common Stock are available for future issuance without
stockholder approval. The Company may use these additional shares of Class&nbsp;A Common Stock for a variety of corporate purposes, including future public offerings to raise additional capital, acquisitions and employee benefit plans. The existence
of authorized but unissued shares of Class&nbsp;A Common Stock Common Stock could render more difficult or discourage an attempt to obtain control of the Company by means of a proxy contest, tender offer, merger or otherwise. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman"><I>Business Combinations </I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Company has opted out of Section&nbsp;203 of the DGCL. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman"><I>Special Meetings of Stockholders </I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Bylaws provide that, except as otherwise required by applicable law or provided in the Certificate of Incorporation, special meetings of
the stockholders, other than those required by statute, may be called at any time (i)&nbsp;by the chairman of the Board, (ii)&nbsp;pursuant to a resolution adopted by the Board, or (iii)&nbsp;by the Board upon the written request of holders of a
majority of the outstanding shares of Common Stock. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Limitations on Liability and Indemnification of Officers and Directors </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Certificate of Incorporation limits the liability of the Company&#146;s directors to the fullest extent permitted by the DGCL, and the
Certificate of Incorporation provides that the Company indemnifies them to the fullest extent permitted by such law. The Company entered into indemnification agreements with the Company&#146;s current directors and officers on the Effective Date as
described above under the caption &#147;Indemnification Agreements&#148;. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Forum for Adjudication of Disputes </I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Certificate of Incorporation provides that unless the Company consents in writing to the selection of an alternative forum, the Court of
Chancery of the State of Delaware will be the sole and exclusive forum for (i)&nbsp;any derivative action or proceeding brought on behalf of the Company; (ii)&nbsp;any action asserting breach of a fiduciary duty owed by any director, officer,
employee or stockholder of the Company to the Company or the Company&#146;s stockholders; (iii)&nbsp;any action asserting a claim arising pursuant to the DGCL, the Certificate Of Incorporation or the Bylaws or as to which the DGCL confers
jurisdiction to the Court of Chancery; or (iv)&nbsp;any action asserting a claim governed by the internal affairs doctrine. Although the Company has included a choice of forum provision in its Certificate of Incorporation, it is possible that a
court could rule that such provision is inapplicable or unenforceable. In addition, this provision would not affect the ability of the Company&#146;s stockholders to seek remedies under the federal securities laws. Although the Company believes this
provision benefits the Company by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against the Company&#146;s directors and
officers. </P> <P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><B>Item&nbsp;8.01</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Other Information. </B></P></TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Forward-Looking Statements </I></B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">This
Current Report on Form <FONT STYLE="white-space:nowrap">8-K,</FONT> including Exhibit 99.2 furnished herewith, contains certain statements that are, or may be deemed to be, &#147;forward-looking statements&#148; within the meaning of
Section&nbsp;27A of the Securities Act and Section&nbsp;21E of the Exchange Act. All statements, other than statements of historical facts, included in this Current Report on Form <FONT STYLE="white-space:nowrap">8-K,</FONT> including Exhibit 99.2
furnished herewith, that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. We have based these
</P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">12 </P>

</DIV></Center>


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<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">

<Center><DIV STYLE="width:8.5in" align="left">
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking
statements relate, in part, to (i)&nbsp;the potential adverse effects of the chapter 11 cases on the Company&#146;s liquidity, results of operations or business prospects, (ii)&nbsp;the ability to execute the Company&#146;s business plan and
(iii)&nbsp;the uncertainty that any trading market for the Class&nbsp;A Common Stock will exist or develop in the <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">over-the-counter</FONT></FONT> markets and are subject to a number of
risks, uncertainties and assumptions, including, among other things, the risk factors discussed in the Company&#146;s most recent Annual Report on Form <FONT STYLE="white-space:nowrap">10-K</FONT> and Quarterly Reports on Form <FONT
STYLE="white-space:nowrap">10-Q</FONT> under the caption &#147;Risk Factors,&#148; as well as in other reports filed from time to time by the Company with the SEC, most of which are beyond our control. The words &#147;believe,&#148; &#147;may,&#148;
&#147;estimate,&#148; &#147;continue,&#148; &#147;anticipate,&#148; &#147;intend,&#148; &#147;plan,&#148; &#147;expect,&#148; &#147;indicate&#148; and similar expressions are intended to identify forward-looking statements. Although we believe that
the forward-looking statements contained in this Current Report on Form <FONT STYLE="white-space:nowrap">8-K,</FONT> including Exhibit 99.2 furnished herewith, are based upon reasonable assumptions, the forward-looking events and circumstances
discussed in this Current Report on Form <FONT STYLE="white-space:nowrap">8-K,</FONT> including Exhibit 99.2 furnished herewith, may not occur and actual results could differ materially from those anticipated or implied in the forward-looking
statements. Any forward-looking statement speaks only as of the date on which such statement is made and we undertake no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or
otherwise. </P> <P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="10%" VALIGN="top" ALIGN="left"><B>Item&nbsp;9.01</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Financial Statements and Exhibits. </B></P></TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><I>(d) Exhibits </I></P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" ALIGN="center">


<TR>
<TD></TD>
<TD VALIGN="bottom" WIDTH="5%"></TD>
<TD WIDTH="92%"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:8pt">
<TD VALIGN="bottom" NOWRAP> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; border-bottom:1.00pt solid #000000; display:table-cell; font-size:8pt; font-family:Times New Roman; "><B>Exhibit<BR>Number</B></P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="center" STYLE="border-bottom:1.00pt solid #000000"> <P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>Description</B></P></TD></TR>


<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>&nbsp;&nbsp;2.1</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="http://www.sec.gov/Archives/edgar/data/872248/000119312519024011/d682539dex21.htm">First Amended Chapter 11 Plan of Reorganization, as Immaterially Modified as of January&nbsp;
28, 2019 of PetroQuest Energy, Inc. and its Debtor Affiliates (incorporated by reference to Exhibit 2.1 to Form <FONT STYLE="white-space:nowrap">8-K</FONT> filed on January&nbsp;31, 2019). </A></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>&nbsp;&nbsp;3.1</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="d701455dex31.htm">Amended and Restated Certificate of Incorporation of PetroQuest Energy, Inc. </A></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>&nbsp;&nbsp;3.2</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="d701455dex32.htm">Amended and Restated Bylaws of PetroQuest Energy, Inc. </A></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>&nbsp;&nbsp;4.1</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="d701455dex41.htm">Indenture dated as of February&nbsp;8, 2019, among PetroQuest Energy, Inc., the guarantors party thereto and Wilmington Trust, N.A., as the trustee and collateral agent. </A></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>&nbsp;&nbsp;4.2</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top">Form of 10% Senior Secured PIK Note due 2024 (<A HREF="d701455dex41.htm">included in Exhibit 4.1</A>)</TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>&nbsp;&nbsp;4.3</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="d701455dex43.htm">Registration Rights Agreement dated as of February&nbsp;8, 2019, by and among PetroQuest Energy, Inc. and the holders party thereto. </A></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>10.1</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="d701455dex101.htm">Term Loan Agreement dated as of February&nbsp;
8, 2019, by and among PetroQuest Energy, LLC, as borrower, PetroQuest Energy, Inc., as parent, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent. </A></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>10.2</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="d701455dex102.htm">Intercreditor Agreement dated as of February&nbsp;
8, 2019, by and among Wells Fargo Bank, National Association, as intercreditor agent, Wilmington Trust, National Association, as collateral agent, PetroQuest Energy, Inc. and PetroQuest Energy, L.L.C. </A></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>10.3</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="d701455dex103.htm">Form of Executive Employment Agreement. </A></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>10.4</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="d701455dex104.htm">Form of Termination Agreement. </A></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>10.5</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="d701455dex105.htm">Form of Indemnification Agreement. </A></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>10.6</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="d701455dex106.htm">PetroQuest Energy, Inc. 2019 Long Term Incentive Plan. </A></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>10.7</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="d701455dex107.htm">Form of Restricted Stock Units Award Agreement. </A></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>10.8</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="d701455dex108.htm">Form of Stock Option Award Agreement. </A></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>99.1</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="http://www.sec.gov/Archives/edgar/data/872248/000119312519024011/d682539dex991.htm">Order Confirming First Amended Chapter 11 Plan of Reorganization, as Immaterially Modified as of January&nbsp;
28, 2019, of PetroQuest Energy, Inc. and Its Debtor Affiliates (incorporated by reference to Exhibit 99.1 of Form <FONT STYLE="white-space:nowrap">8-K</FONT> filed January&nbsp;31, 2019). </A></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top" NOWRAP>99.2</TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"><A HREF="d701455dex992.htm">News Release dated February&nbsp;11, 2019. </A></TD></TR>
</TABLE>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">13 </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center"><B>SIGNATURE </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Date: February&nbsp;11, 2019 </P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
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<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">PETROQUEST ENERGY, INC.</TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="16"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ J. Bond Clement</P></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">J. Bond Clement</TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Executive Vice President, Chief Financial Officer and Treasurer</TD></TR>
</TABLE></DIV>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">14 </P>

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</BODY></HTML>
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8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 11, 2019 (February 8, 2019)
PetroQuest Energy, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware
001-32681
72-1440714
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
400 E. Kaliste Saloom Rd., Suite 6000
Lafayette, Louisiana
70508
(Address of Principal Executive Offices)
(Zip Code)
Registrant's Telephone Number, Including Area Code: (337)
232-7028
Check the appropriate box below
if the Form
8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (
see
General Instruction A.2. below):
☐
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule
14a-12
under the Exchange Act (17
CFR
240.14a-12)
☐
Pre-commencement
communication pursuant to Rule
14d-2(b)
under the Exchange Act (17 CFR
240.14d-2(b))
☐
Pre-commencement
communication pursuant to Rule
13e-4(c)
under the Exchange Act (17 CFR
240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or
Rule
12b-2
of the Securities Exchange Act of 1934 (17 CFR
§240.12b-2).
Emerging growth company  ☐
If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act.  ☐
EXPLANATORY NOTE
As previously reported by PetroQuest Energy, Inc. ("PetroQuest," the "Company," "we," "our," and
"us") on November 6, 2018 (the "Petition Date"), the Company, PetroQuest Energy, L.L.C. ("PQE") and certain of our other wholly-owned direct and indirect subsidiaries (collectively, the "Debtors") filed
voluntary petitions seeking relief under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for Southern District of Texas (the "Court") to pursue a Chapter 11 plan of
reorganization under the caption In re
PetroQuest Energy Inc., et. al
(Case
No. 18-36322)
(the "Chapter 11 Cases").
On January 31, 2019, the Court entered an order (the "Confirmation Order") confirming the Debtors' First Amended Chapter
11 Plan of Reorganization, as Immaterially Modified as of January 28, 2019 (as amended, modified or supplemented from time to time, the "Plan") under Chapter 11 of the Bankruptcy Code.
On February 8, 2019 (the "Effective Date"), the Plan became effective in accordance with its terms and the Debtors emerged from
the Chapter 11 Cases. The descriptions of the Plan and the Confirmation Order in this Current Report on Form
8-K
are qualified in their entirety by reference to the full text of the Plan and the Confirmation
Order, which are filed herewith as Exhibit 2.1 and Exhibit 99.1, respectively, and incorporated herein by reference.
Item 1.01
Entry Into a Material Definitive Agreement.
Exit Facility
On the Effective
Date, pursuant to the terms of the Plan and the Confirmation Order, PQE, as borrower, and the Company, as parent, entered into the Term Loan Agreement (the "Exit Facility") with the lenders party thereto (which were lenders under the
Company's Multidraw Term Loan Agreement (as defined below) and certain holders of the Company's Old Notes (as defined below) that subscribed to be a lender pursuant to the syndication process) and Wells Fargo Bank, National Association, as
administrative agent. The Exit Facility provides for a $50.0 million term loan facility.
The proceeds of the Exit Facility were used
to repay in full the loans and other obligations under the Company's Multidraw Term Loan Agreement. The maturity date of the Exit Facility is November 8, 2023. The interest rate per annum is equal to (i) in the case of LIBOR Loans (as
defined in the Exit Facility), 7.50% per annum and (ii) in the case of Base Rate Loans (as defined in the Exit Facility), 6.50% per annum. The Exit Facility is secured by a first priority lien on substantially all of the assets of the Company
and certain of its subsidiaries.
The Company and its subsidiaries are subject to a restrictive covenant under the Exit Facility,
consisting of maintaining a ratio of (i) the present value, discounted at 10% per annum, of the estimated future net revenues in respect of the Company's and its subsidiaries' oil and gas properties, before any state, federal, foreign
or other income taxes, attributable to total proved reserves, using strip prices then in effect at the end of each calendar quarter, including swap agreements in place at the end of each quarter, to (ii) the sum of the aggregate outstanding
principal amount of the term loans to be less than 1.50 to 1.00 as measured on the last day of each calendar. If the Company fails to maintain the ratio, the Company may either (i) prepay the outstanding term loans such that after giving effect
to such prepayment, the financial covenant is met or (ii) be in default under the Exit Facility, in which case the term loans and all other amounts owed pursuant to the Exit Facility would become immediately due and payable.
The Exit Facility also contains customary affirmative and negative covenants, including as to compliance with laws (including environmental
laws, ERISA and anti-corruption laws), maintenance of required insurance, delivery of quarterly and annual financial statements, maintenance and operation of property (including oil and gas properties), restrictions on the incurrence of liens and
indebtedness, entering into mergers, consolidations and sales of assets, and transactions with affiliates and other customary covenants.
The Exit Facility contains customary events of default and remedies for credit facilities of this nature. If the Company, PQE or any
subsidiary does not comply with the financial and other covenants in the Exit Facility, the lenders may, subject to customary cure rights, require immediate payment of all amounts outstanding under the Exit Facility.
2
The foregoing description of the Exit Facility is qualified in its entirety by reference to
the full text of the Exit Facility, which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
2024 PIK Notes
On the Effective Date, pursuant to the terms of the Plan and the Confirmation Order, the Company entered into an indenture (the
"Indenture") by and among the Company, PQE, as guarantor (the "Guarantor"), and Wilmington Trust, National Association, as trustee (the "Trustee") and collateral agent, and issued $80.0 million of the
Company's 10% Senior Secured PIK Notes due 2024 (the "2024 PIK Notes") pursuant thereto.
Interest on the 2024 PIK Notes
accrues at a rate of 10% per annum payable semi-annually in kind ("PIK Interest") on February 15 and August 15 of each year, beginning on August 15, 2019. At the election of the Board of Directors of the Company (the
"Board"), so long as the Company has provided notice to the holders of the 2024 PIK Notes and the Trustee of such election at least 30 days prior to any applicable interest payment date, interest on the 2024 PIK Notes for any interest
period may instead be payable at the annual rate (i) solely in cash (the "Cash Interest") or (ii) partially as Cash Interest and partially as PIK Interest. The maturity date of the 2024 Notes is February 15, 2024. The 2024
PIK Notes are secured on a second priority lien basis by the equity of PQE that also secures the Exit Facility. Pursuant to the terms of the Intercreditor Agreement (as defined below), the security interest in those assets that secure the 2024 PIK
Notes and the related guarantee will be contractually subordinated to liens thereon that secure the Exit Facility and certain other permitted obligations as set forth in the Indenture. Consequently, the 2024 PIK Notes and the related guarantee will
be effectively subordinated to the Exit Facility and such other permitted obligations to the extent of the value of such assets.
The
Company may, at its option, on any one or more occasions redeem all or a portion of the 2024 PIK Notes issued under the Indenture at the redemption prices set forth below (expressed in percentages of principal amount on the redemption date),
plus
accrued and unpaid Cash Interest together with an amount of cash equal to all accrued and unpaid PIK Interest on the 2024 PIK Notes to be redeemed to, but not including, the redemption date (subject to the right of holders of the 2024
PIK Notes of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the periods set forth below:
Period
Redemption
Price
February 8, 2019 to February 7, 2020
102.000
%
February 8, 2020 to February 7, 2021
101.000
%
February 8, 2021 and thereafter
100.000
%
Upon the occurrence of certain change of control events, any holder of the 2024 PIK Notes will have the right
to cause the Company to repurchase all or any part of such holder's 2024 PIK Notes at a repurchase price payable in cash equal to 101% of the principal amount of the 2024 PIK Notes to be repurchased (including any PIK Notes (as defined in the
Indenture) or any increase in principal amount of the 2024 PIK Notes in connection with PIK Interest, plus accrued interest to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on
the related interest payment date).
The Indenture contains certain customary events of default, including: (1) default in the
payment of any interest when it becomes due and payable, and continuance of such default for a period of 30 days, (2) default in the payment of principal at maturity, upon optional redemption, upon declaration of acceleration or otherwise or
failure to purchase the 2024 PIK Notes when required pursuant to the Indenture or the 2024 PIK Notes, (3) default in the performance or breach of certain covenants in the Indenture, which default continues uncured for a period of 60 days (or
(x) 30 days in the case of failure to comply with certain restrictive covenants and (y) 120 days in the case of failure to comply with reporting obligations under the Indenture) after (i) the Company receives written notice from the Trustee or
(ii) the Company and the Trustee receive written notice from the holders of not less than 25% in principal amount of the 2024 PIK Notes as provided in the Indenture, (4) certain voluntary or involuntary events of bankruptcy, insolvency or
winding up or liquidation of the Company or the Guarantor, (5) any judgment or decree for the payment of money in excess of $10.0 million or its foreign currency equivalent at the time such judgment or decree is entered against the
Company, any subsidiary guarantor under the Indenture or any significant subsidiary under the Indenture, remains outstanding for a period of 60 consecutive days following the entry of such judgment or decree and is not discharged, waived or the
execution thereof stayed and (6) the occurrence of the following: (x) except as permitted by the Note Documents (as
3
defined in the Indenture), any Note Document establishing the liens securing the notes obligations ceases for any reason to be enforceable;
provided
that it will not be an event of default
under the Indenture if the sole result of the failure of one or more Note Documents to be fully enforceable is that any lien purported to be granted under such Note Documents on collateral, individually or in the aggregate, having a fair market
value of not more than $15.0 million, ceases to be an enforceable and perfected lien;
provided
further
, that if such failure is susceptible to cure, no event of default shall arise with respect thereto until 45 days after any
officer of the Company or any restricted subsidiary becomes aware of such failure, which failure has not been cured during such time period, (y) except as permitted by the Note Documents, any lien purported to be granted under any Note Document
on collateral, individually or in the aggregate, having a fair market value in excess of $15.0 million, ceases to be an enforceable and perfected second priority lien, subject to the Intercreditor Agreement and permitted liens
provided
that if such failure is susceptible to cure, no event of default shall arise with respect thereto until 45 days after any officer of the Company or any restricted subsidiary under the Indenture becomes aware of such failure, which failure has not
been cured during such time period and (z) the Company or any other grantor under the Indenture, or any person acting on behalf of any of them, denies or disaffirms, in writing, any obligation of the Company or any other grantor under the
Indenture set forth in or arising under any Note Document establishing liens securing the notes obligations.
If a default occurs and is
continuing and is actually known to a trust officer of the Trustee, the Trustee must send to each holder of the 2024 PIK Notes notice of the default within 90 days after it occurs. Except in the case of defaults in payment involving the payment of
principal of or interest with respect to any 2024 PIK Note, the Trustee may withhold notice if and so long as it in good faith determines that withholding notice is not opposed to the interests of the holders of the 2024 PIK Notes.
The foregoing description of the Indenture is qualified in its entirety by reference to the full text of the Indenture, which is filed
herewith as Exhibit 4.1 and incorporated herein by reference. The foregoing description of the 2024 PIK Notes is qualified in its entirety by reference to the form of 2024 PIK Notes, which is included as Exhibit A to the Indenture and incorporated
herein by reference.
Intercreditor Agreement
On the Effective Date, in accordance with the Plan and the Confirmation Order, Wells Fargo Bank, National Association, as intercreditor agent,
Wilmington Trust, National Association, as collateral agent, the Company and PQE entered into a lien subordination and intercreditor agreement (the "Intercreditor Agreement") to govern the relationship of holders of the 2024 PIK Notes, the
lenders under the Exit Facility and holders of other priority lien obligations with respect to certain collateral and certain other matters.
The foregoing description of the Intercreditor Agreement is qualified in its entirety by reference to the full text of the Intercreditor
Agreement, which is filed herewith as Exhibit 10.2 and incorporated herein by reference.
Registration Rights Agreement
On the Effective Date, in accordance with the Plan and the Confirmation Order, the Company entered into a registration rights agreement (the
"Registration Rights Agreement") with certain recipients of shares of the Class A Common Stock, par value $0.01 per share (the "Class A Common Stock") of the Company and the 2024 PIK Notes distributed on the Effective
Date (collectively, the "Registration Rights Holders").
The Registration Rights Agreement requires the Company to file a shelf
registration statement (the "Initial Shelf Registration Statement") that includes the Registrable Securities (as defined in the Registration Rights Agreement), whose inclusion has been timely requested and subject to certain limitations,
with the Securities and Exchange Commission (the "SEC") no later than five business days after the Company files its first Quarterly Report on Form
10-Q
or Annual Report on Form
10-K
with the SEC after the Effective Date, and use its reasonable best efforts to have the Initial Shelf Registration Statement declared effective as soon as reasonably practicable after the Company files the
Initial Shelf Registration Statement (but in no event later than 75 days after it shall have filed such Shelf Registration Statement, unless it is not practicable to do so due to circumstances directly relating to outstanding comments of the SEC
relating to the Initial Shelf Registration Statement; provided that the Company is using its reasonable best efforts to address any such comments as promptly as possible). The Registration Rights Agreement also provides the Registration Rights
Holders the ability to demand registrations or underwritten shelf takedowns subject to certain requirements and exceptions.
4
In addition, if the Company proposes to register shares of the Class A Common Stock in
certain circumstances, the Registration Rights Holders will have certain "piggyback" registration rights, subject to restrictions set forth in the Registration Rights Agreement, to include their shares of the Class A Common Stock in
the registration statement.
These registration rights are subject to certain conditions and limitations, including the right of
underwriters to limit the Registrable Securities to be included in an underwritten offering and the Company's right to delay or withdraw a registration statement under certain circumstances. The Company will generally pay all registration
expenses in connection with its obligations under the Registration Rights Agreement, regardless of whether a registration statement is filed or becomes effective. The registration rights granted in the Registration Rights Agreement are subject to
customary indemnification and contribution provisions, as well as customary restrictions, such as blackout periods.
The Registration
Rights Agreement also provides that (a) for so long as the Company is subject to the requirements to publicly file information or reports with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Company will timely file all information and reports with the SEC and comply with all such requirements, and (b) if the Company is not subject to the requirements of Section 13 or 15(d) of the Exchange Act,
make available information necessary to comply with Section 4(a)(7) of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 144 and Rule 144A, if available, with respect to resales of the Registrable Securities
under the Securities Act, at all times, all to the extent required from time to time to enable such Registration Rights Holder to sell Registrable Securities without registration under the Securities Act.
The foregoing description of the Registration Rights Agreement is qualified in its entirety by reference to the full text of the Registration
Rights Agreement, which is filed herewith as Exhibit 4.3 and incorporated herein by reference.
Item 1.02
Termination of Material Definitive Agreements
Equity Interests
On the Effective
Date, by operation of the Plan, all agreements, instruments, and other documents evidencing, relating to or connected with any equity interests of the Company, including the Company's common stock, par value $0.001 (the "Old Common
Stock") and 6.875% Series B Cumulative Convertible Perpetual Preferred Stock ("Old Preferred Stock"), issued and outstanding immediately prior to the Effective Date, and any rights of any holder in respect thereof, were deemed
cancelled, discharged and of no force or effect.
Debt Securities and Credit Agreement
On the Effective Date, by operation of the Plan, all outstanding obligations under the following notes issued by the Company were cancelled and
the indentures governing such obligations were cancelled:
•
10% Second Lien Secured Senior Notes due 2021 (the "2021 Notes"), issued pursuant to that certain
Indenture dated February 17, 2016, by and among the Company, as issuer, certain of the Company's subsidiaries, as guarantors, and Wilmington Trust, N.A., as trustee and collateral trustee; and
•
10% Second Lien Senior Secured PIK Notes due 2021 (the "2021 PIK Notes" and together with the 2021
Notes, the "Old Notes"), issued pursuant to that certain Indenture dated September 27, 2016, by and among the Company, as issuer, certain of the Company's subsidiaries, as guarantors, and Wilmington Trust, N.A., as trustee.
On the Effective Date, as provided by the Plan and Confirmation Order, the Multidraw Term Loan Agreement, dated as of
August 31, 2018 (the "Multidraw Term Loan Agreement"), by and among PQE, as the borrower, the Company and TDC Energy, LLC, as guarantors, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent,
was fully discharged. The obligations owing to the lenders under the Multidraw Term Loan Agreement were replaced by the obligations under the Exit Facility.
5
Item 2.02
Results of Operations and Financial Condition.
On February 11, 2018, the Company issued a news release reporting 2018 estimated proved oil and gas reserves and production. The news
release is filed herewith as Exhibit 99.2 and incorporated herein by reference.
In accordance with General Instruction B.2 of Form
8-K,
the foregoing information, including Exhibit 99.2, shall not be deemed "filed" for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor
shall such information and Exhibit 99.2 be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance
Sheet Arrangement of a Registrant
The information regarding the
Exit Facility and the Indenture set forth in Item 1.01 of this Report is incorporated by reference herein.
Item 3.02
Unregistered Sales of Equity Securities
On the Effective Date, pursuant to the terms of the Plan, the Company issued 8,900,000 shares of Class A Common Stock pro rata to the
holders of the Old Notes. In addition, pursuant to the terms of the Plan, the Company issued 300,000 shares of Class A Common Stock to certain holders of the Old Notes for their commitment to backstop the Exit Facility. As of the Effective
Date, there were approximately 9.2 million shares of Class A Common Stock outstanding.
The Plan and Confirmation Order provide
for the exemption of the offer and sale of the 8,900,000 shares of Class A Common Stock from the registration requirements of the Securities Act
pursuant to Section 1145(a)(1) of the Bankruptcy Code. The shares of
Class A Common Stock issued to certain holders of the Old Notes for their commitment to backstop the Exit Facility were issued in a private placement transaction in reliance upon an exemption from registration pursuant to Section 4(a)(2)
of the Securities Act.
Item 3.03
Material Modification to Rights of Security Holders
As provided in the Plan and the Confirmation Order, all notes, stock, agreements, instruments, certificates, and other documents evidencing any
claim against or interest in the Debtors with respect to securities of the Company were cancelled on the Effective Date and the obligations of the Debtors thereunder or in any way related thereto were fully released. The securities cancelled on the
Effective Date include all of the Old Common Stock, the Old Preferred Stock and the Old Notes. For further information, see Items 1.01, 1.02, 3.02 and 5.01 of this Report, which are incorporated herein by reference.
Item 5.01
Changes in Control of Registrant
As previously disclosed, on the Effective Date, all previously issued and outstanding shares of the Old Common Stock were cancelled, and the
Company issued shares of Class A Common Stock pro rata to the holders of the Old Notes pursuant to the Plan. For further information, see Items 1.01, 1.02, 3.02, 3.03 and 5.02 of this Report, which are incorporated herein by reference.
6
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
Departure and Appointment of Directors
Pursuant to the Plan and Confirmation Order, as of the Effective Date, the following directors ceased to serve on the Board: J. Gerard Jolly,
W. J. Gordon, III, Charles F. Mitchell, II, M.D., E. Wayne Nordberg and William W. Rucks, IV. Charles T. Goodson, the Company's President and Chief Executive Officer, remained on the Board.
Pursuant to the Plan and the Confirmation Order, as of the Effective Date, the Board consists of the following persons: Neil P. Goldman,
Charles T. Goodson, John "Brad" Juneau, Harry Quarls and David I. Rainey.
As of the filing of this Report, the Board has not
determined any committee assignments.
Employment Agreements
The executive officers of the Company will remain the same and the Company entered into new employment agreements with the following executive
officers on the Effective Date: Charles Goodson, Chief Executive Officer and President of the Company, J. Bond Clement, the Executive Vice President, Chief Financial Officer and Treasurer of the Company, Arthur M. Mixon, III, the Executive Vice
President – Operations and Production of the Company, Stephen H. Green, Senior Vice President – Exploration of the Company, and Edgar A. Anderson, Vice President of the ArkLaTex Region of the Company.
Each of the employment agreements has a term of one year with automatic
one-year
renewals unless
either party provides the other with at least 60 days advance written notice of
non-renewal.
In the event the agreement is terminated by us without "cause" or due to the death or
"disability" of the executive, the executive or his estate will receive, subject to certain conditions, severance equal to his annual base salary, payable in equal semi-monthly installments, for 12 months following the date of termination.
In addition, in the event the agreement is terminated by us without "cause", we will continue, subject to certain conditions, the executive's health and welfare benefits at our cost for 12 months following the date of termination.
Each agreement prohibits the executive from engaging in various activities outside his employment with the Company without the Company's approval and prohibits the disclosure of confidential information. In addition, each agreement contains a
non-competition
agreement and
non-solicitation
restrictions prohibiting the executive from competing with the Company or soliciting its employees, customers or acquisition
prospects during his employment and for one year after termination of the agreement for any reason, subject to certain exceptions.
The
foregoing description of the executive employment agreements is qualified in its entirety by reference to the full text of the form of executive employment agreement entered into with Messrs. Goodson, Clement, Mixon, Green and Anderson, which is
filed herewith as Exhibit 10.3 and incorporated by reference herein.
Termination Agreements
The Company also entered into termination agreements with Messrs. Goodson, Clement, Mixon, Green and Anderson on the Effective Date. The
termination agreements provide for the payment of severance benefits upon certain "change in control" events and subsequent termination of the executive's employment within two years after such "change in control" by us
other than for "cause" or by the executive for "good reason." Each of the agreements has an initial term through December 31, 2019, with automatic
one-year
renewals beginning on
January 1, 2020 and each January 1 thereafter unless, not later than September 30 of the preceding year, the Company gives notice of the Company's intent not to extend any of the agreements. Even if the Company timely gives
notice, each of the agreements will automatically be extended for 24 months beyond its term if a "change in control" event occurred during the term of any of the agreements. In the event that an executive's employment is terminated
after a "change in control" event by us without "cause" or by the executive for "good reason", the executive will receive, subject to certain conditions, a lump sum severance payment equal to two times the sum of his
annual base salary and most recent annual bonus. In addition, we will continue, subject to certain conditions, the executive's health and welfare benefits at our cost for 24 months following the date of termination. An executive is not entitled
to any benefits under the agreement if the executive's employment terminates due to the executive's retirement at age 65, the executive's "total and permanent disability" or the
7
executive's death. The Company is required to reimburse the executives for all legal fees and expenses incurred by them as a result of a termination which entitles them to any payments under
the agreements, including all such fees and expenses incurred in contesting or disputing any notice of termination under the agreements or in seeking to obtain or enforce any right or benefit provided by the agreements or in connection with any tax
audit or proceeding relating to the application of excise taxes to any payment or benefit under the agreements.
The foregoing description
of the termination agreements is qualified in its entirety by reference to the full text of the form of termination agreement entered into with Messrs. Goodson, Clement, Mixon, Green and Anderson, which is filed herewith as Exhibit 10.4 and
incorporated by reference herein.
Indemnification Agreements
On the Effective Date, the Company entered into indemnification agreements with each of its directors and executive officers. The
indemnification agreements require the Company to (i) indemnify these individuals to the fullest extent permitted by the Delaware General Corporation Law, as amended (the "DGCL"), against liabilities that may arise by reason of their
service to the Company, and (ii) advance expenses reasonably incurred as a result of any proceeding against them as to which they could be indemnified. The Company may enter into indemnification agreements with any future directors or executive
officers.
The foregoing description of the indemnification agreements is qualified in its entirety by reference to the full text of the
form of indemnification agreement, which is filed herewith as Exhibit 10.5 and incorporated herein by reference.
Management Incentive Plan
On the Effective Date, pursuant to the operation of the Plan and Confirmation Order, the 2019 Long Term Incentive Plan (the
"Management Incentive Plan") became effective. The Management Incentive Plan is an equity-based compensation plan providing for and permitting the grant of awards to eligible participants including, among other things, in the form of
unrestricted shares of Class A Common Stock, stock options to purchase shares of Class A Common Stock and restricted stock units to be settled in shares of Class A Common Stock, in some cases subject to the satisfaction of certain
vesting criteria.
The Board will administer the Management Incentive Plan. The Management Incentive Plan provides for a reserve of
1,344,000 shares of Class A Common Stock on the Effective Date.
The awards to be granted under the Management Incentive Plan will be
subject to customary anti-dilution and other adjustments for changes in capitalization and other events. The awards to be granted pursuant to the Management Incentive Plan will be granted by the Board in its discretion.
The foregoing description of the Management Incentive Plan is qualified in its entirety by reference to the full text of the Management
Incentive Plan, which is filed herewith as Exhibit 10.6 and incorporated herein by reference.
New Award Grants
On the Effective Date and pursuant to the Plan and Confirmation Order, restricted stock units ("RSUs") were awarded to Messrs.
Goodson, Clement and Mixon pursuant to the Management Incentive Plan as follows: 379,582 RSUs, 126,528 RSUs and 126,528 RSUs, respectively.
The RSUs will be settled in shares of Class A Common Stock within a specified period following vesting. The RSUs are subject to vesting
as follows:
•
Approximately 41.7% of the RSUs were fully vested upon grant.
•
Subject to continuing employment on the vesting date, approximately 16.6% of the RSUs will fully vest on the
earlier to occur of (i) the
one-year
anniversary of the Effective Date or (ii) a "Change in Control" (as defined in the participant's Termination Agreement). In the event of the
termination of a participant's employment by the Company for any reason (other than for cause) or in the event of the participant's death or disability, these RSUs will become fully vested.
8
•
Subject to continuing employment on the vesting date, approximately 41.7% of the RSUs will fully vest on the
earliest to occur of (i) the three-year anniversary of Effective Date (ii) a Change in Control or (iii) the attainment of a
20-trading
day volume-weighted average price of $20.00 following the
date of grant. In the event of the termination of a participant's employment for any reason (other than death or disability) prior to vesting, these RSUs will be forfeited.
On the Effective Date and pursuant to the Plan and Confirmation Order, stock options ("Options") were awarded to Messrs. Goodson,
Clement and Mixon pursuant to the Management Incentive Plan as follows: 189,791 Options, 63,264 Options and 63,264 Options, respectively. One half of the Options granted to each recipient have an exercise price of $10.00 per share and the other half
have an exercise price of $12.50 per share. The Options vest upon the earlier to occur of (i) a
20-trading
day volume-weighted average price of a share of the Class A Common Stock at least equal to
the applicable exercise price following the date of grant or (ii) a "Change in Control" (as defined in the participant's Termination Agreement).
The foregoing descriptions of the RSUs and the Options are qualified in their entirety by reference to the full text of the form of Restricted
Stock Units Award Agreement and the form of Stock Option Award Agreement, which are filed herewith as Exhibit 10.7 and Exhibit 10.8, respectively, and incorporated herein by reference.
Certain Relationships and Related Party Transactions
The transactions described under the heading "Registration Rights Agreement" in Item 1.01 of this Current Report on Form
8-K
and the transactions in connection with the issuances described in Item 3.02 of this Current Report on Form
8-K
may be deemed to be related party transactions. As
such, the disclosures contained therein are incorporated into this Item 5.02 by reference.
Item 5.03
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On the Effective Date, pursuant to the terms of the Plan and the Confirmation Order, the Company filed the Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") with the Secretary of State of Delaware. Also on the Effective Date, and pursuant to the terms of the Plan and the Confirmation Order, the Company adopted the Amended and Restated Bylaws
(the "Bylaws").
The Certificate of Incorporation provides that the total number of shares of capital stock that the Company is
authorized to issue is 75,000,000 shares, consisting of (a) 64,999,998 shares of Class A Common Stock, (b) one share of Class B Common Stock, par value $0.01 per share (the "Class B Common Stock"), (c) one share of
Class C Common Stock, par value $0.01 per share (the "Class C Common Stock" and together with the Class A Common Stock and the Class B Common Stock, the "Common Stock") and (d) 10,000,000 shares of preferred
stock, par value $0.01 per share (the "Preferred Stock").
The descriptions of the Certificate of Incorporation and the Bylaws
are qualified in their entirety by reference to the full texts of the Certificate of Incorporation and the Bylaws, which are filed herewith as Exhibits 3.1 and 3.2, respectively, and incorporated herein by reference.
Common Stock
Holders of the
Common Stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders (except with respect to an election of directors as described below) and do not have cumulative voting rights. Holders of Common Stock are
entitled to receive proportionately any dividends as may be declared by the Board, subject to any preferential dividend rights of any series of Preferred Stock that is outstanding at the time of the dividend.
The Certificate of Incorporation provides that the total number of directors constituting the Board shall initially be comprised of five
directors. The directors shall consist of a single class, with an initial term of office to expire at the 2020 annual meeting of the stockholders to take place in 2020 (the "Initial Term").
9
On the Effective Date, the Class B Holder (as defined in the Certificate of
Incorporation) was issued one share of Class B Common Stock (the "Class B Holder"). The Class B Holder, as the holder of the only outstanding share of Class B Common Stock, has the right to elect two directors. The
initial term of such directors is the Initial Term, and the Class B Holder will continue to have the right to elect two directors for so long as Corre (as defined in the Certificate of Incorporation) holds at least 20% of the then-outstanding
Class A Common Stock (excluding shares of Class A Common Stock issued pursuant to an incentive plan or other incentive arrangement approved by the Board). If Corre holds less than 20% of the then-outstanding Class A Common Stock, the
Class B Holder shall have the right to elect one director for so long as Corre holds at least 10% of the then-outstanding Class A Common Stock (excluding any shares of Class A Common Stock issued pursuant to an incentive plan or other
incentive arrangement approved by the Board).
On the Effective Date, the Class C Holder (as defined in the Certificate of
Incorporation) was issued one share of Class C Common Stock. The Class C Holder, as the holder of the only outstanding share of Class C Common Stock, has the right to elect two directors. The initial term of such directors is the
Initial Term, and the Class C Holder will continue to have the right to elect two directors for so long as MacKay (as defined in the Certificate of Incorporation) holds at least 20% of the then-outstanding Class A Common Stock (excluding
shares of Class A Common Stock issued pursuant to an incentive plan or other incentive arrangement approved by the Board). If MacKay holds less than 20% of the then-outstanding Class A Common Stock, the Class C Holder shall have the
right to elect one director for so long as MacKay holds at least 10% of the then-outstanding Class A Common Stock (excluding any shares of Class A Common Stock issued pursuant to an incentive plan or other incentive arrangement approved by
the Board).
In the event of the Company's liquidation or dissolution, the holders of Common Stock are entitled to receive
proportionately the Company's net assets available for distribution to stockholders after payment of all debts and other liabilities and subject to the prior rights of any outstanding Preferred Stock.
All shares of Common Stock will, when issued, be duly authorized, fully paid and nonassessable. The rights, preferences and privileges of
holders of Common Stock are subject to the rights of the holders of shares of any series of Preferred Stock that the Company may designate and issue in the future.
The Common Stock is not entitled to preemptive or other similar subscription rights to purchase any of the Company's securities. The
Common Stock is not convertible and no redemption or sinking fund provisions are applicable to the Common Stock. Unless the Board determines otherwise, the Company will issue all of its Class A Common Stock in the form of one or more global
certificates to be deposited in the facilities of the Depository Trust Company.
Preferred Stock
The Board has the authority to issue shares of Preferred Stock from time to time on terms it may determine, to divide shares of Preferred Stock
into one or more series and to fix the designations, preferences, privileges and restrictions of Preferred Stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms and the
number of shares constituting any series or the designation of any series to the fullest extent permitted by the DGCL. The issuance of the Preferred Stock could have the effect of decreasing the trading price of the Class A Common Stock,
restricting dividends on the Company's capital stock, diluting the voting power of the Class A Common Stock, impairing the liquidation rights of the Company's capital stock, or delaying or preventing a change in control of the
Company.
Restrictions on Transfer
The Certificate of Incorporation provides that, as long as Corre and MacKay beneficially hold, collectively, 33% of the issued and outstanding
shares of Class A Common Stock, if a beneficial holder of Class A Common Stock or group of beneficial holders of Class A Common Stock, collectively comprising at least a majority of the then outstanding shares of Class A Common
Stock (the "Selling Stockholders"), wish to sell shares of Class A Common Stock owned by them and comprising at least a majority of all then outstanding shares of Class A Common Stock (on a fully diluted basis) to any person who
is not an affiliate of the Selling Stockholder (such person, excluding any affiliate of a Selling Stockholder,
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a "Third Party Purchaser") for cash or publicly traded securities or a combination thereof, either in a transfer or in a merger (or similar transaction), other combination,
consolidation, recapitalization or reorganization (a "Drag-Along Sale"), then such Selling Stockholder shall have the right to require the other holders of Class A Common Stock to (x) sell all of their shares of Class A
Common Stock to such Third Party Purchaser in connection with such Drag-Along Sale and otherwise on the same terms of such Selling Stockholders selling such shares of Class A Common Stock and (y) vote in favor thereof and use their best
efforts to cooperate in the Drag-Along Sale as reasonably requested by the Board, including by waiving any appraisal or similar rights with respect to the Drag-Along Sale and executing any action by written consent of the holders of Class A
Common Stock. In addition, the Certificate of Incorporation provides that, as long as Corre and MacKay beneficially hold, collectively, 33% of the issued and outstanding shares of Class A Common Stock, if the Board approves a Change of Control
(as defined in the Certificate of Incorporation) (an "Approved Sale"), then each holder of Class A Common Stock agrees to vote in favor thereof and will use its best efforts to cooperate in the Approved Sale as reasonably requested by
the Board, including by waiving any appraisal or similar rights with respect to the Approved Sale and executing any action or actions by written consent of the holders of Class A Common Stock.
The Certificate of Incorporation contains restrictions on the transfer of certain of the Company's securities (including the Common
Stock) by holders who are, or would become as a result of such transfer, a holder of at least 4.9% of the common stock. In particular, without the approval of the Board, no person or group of persons treated as a single entity under Treasury
Regulation
Section 1.382-3
will be permitted to acquire, whether directly, indirectly or constructively, and whether in one transaction or a series of related transactions, any of our Common Stock or any
other instrument treated as stock for purposes of Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), to the extent that after giving effect to such purported acquisition (a) the purported acquirer, or any
other person by reason of the purported acquirer's acquisition, would become a Substantial Holder (as defined in the Certificate of Incorporation), or (b) the percentage of ownership of our Common Stock by a Tax Person (as defined in the
Certificate of Incorporation) that, prior to giving effect to the purported acquisition, is already a Substantial Holder would be increased. In addition, without the approval of the Board, no Substantial Holder will dispose any of our Common Stock.
Such restrictions were put in place in order to preserve the net operating loss carryforwards, capital loss carryforwards, general business credit carryforwards, alternative minimum tax credit carryforwards and foreign tax credit carryforwards, as
well as any "net unrealized
built-in
loss" within the meaning of Section 382 of the Code, of the Company or any direct or indirect subsidiary thereof (collectively, the "Tax
Benefits"). Such restrictions will be in in place from the Effective Date to the earlier to occur of (i) any date after the Effective Date if the Board in good faith determines that it is in the best interests of the Company and its
stockholders for such restrictions to expire, (ii) the beginning of a taxable year of the Company as of which no Tax Benefits are available, (iii) the second anniversary of the Effective Date, (iv) the date selected by the holders of
a majority of the voting power of the Company or (v) the repeal, amendment or modification of Section 382 of the Code in such a way as to render the restrictions imposed by Section 382 of the Code no longer applicable to the Company.
Anti-takeover Effects of the Certificate of Incorporation and Bylaws
The Certificate of Incorporation and Bylaws contain provisions, including the Restrictions on Transfer described above, that may delay, defer
or discourage another party from acquiring control of the Company. The Company expects that these provisions, including those summarized below, will discourage coercive takeover practices or inadequate takeover bids. These provisions are also
designed to encourage persons seeking to acquire control of the Company to first negotiate with the Board, which the Company believes may result in an improvement of the terms of any such acquisition in favor of the Company's stockholders.
However, they also give the Board the power to discourage acquisitions that some stockholders may favor.
Stockholder Action and
Advance Notice Requirements for Stockholder Proposals
The Company's Certificate of Incorporation provides that stockholders may
take action by written consent if the consent is signed by holders of the Company's outstanding shares having the number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon
were present and voted.
The Bylaws require advance notice procedures for stockholder proposals to be brought before an annual meeting or
special meeting of the stockholders, including the nomination of candidates for election as directors. Stockholders at an annual meeting or special meeting may only consider the proposals specified in the notice of meeting or brought before the
meeting by or at the direction of the Board, or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered a timely written notice in proper form to the Company's secretary, of
the stockholder's intention to bring such business before the meeting.
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Authorized but Unissued Shares
Under Delaware law, the Company's authorized but unissued shares of Class A Common Stock are available for future issuance without
stockholder approval. The Company may use these additional shares of Class A Common Stock for a variety of corporate purposes, including future public offerings to raise additional capital, acquisitions and employee benefit plans. The existence
of authorized but unissued shares of Class A Common Stock Common Stock could render more difficult or discourage an attempt to obtain control of the Company by means of a proxy contest, tender offer, merger or otherwise.
Business Combinations
The Company has opted out of Section 203 of the DGCL.
Special Meetings of Stockholders
The Bylaws provide that, except as otherwise required by applicable law or provided in the Certificate of Incorporation, special meetings of
the stockholders, other than those required by statute, may be called at any time (i) by the chairman of the Board, (ii) pursuant to a resolution adopted by the Board, or (iii) by the Board upon the written request of holders of a
majority of the outstanding shares of Common Stock.
Limitations on Liability and Indemnification of Officers and Directors
The Certificate of Incorporation limits the liability of the Company's directors to the fullest extent permitted by the DGCL, and the
Certificate of Incorporation provides that the Company indemnifies them to the fullest extent permitted by such law. The Company entered into indemnification agreements with the Company's current directors and officers on the Effective Date as
described above under the caption "Indemnification Agreements".
Forum for Adjudication of Disputes
The Certificate of Incorporation provides that unless the Company consents in writing to the selection of an alternative forum, the Court of
Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company; (ii) any action asserting breach of a fiduciary duty owed by any director, officer,
employee or stockholder of the Company to the Company or the Company's stockholders; (iii) any action asserting a claim arising pursuant to the DGCL, the Certificate Of Incorporation or the Bylaws or as to which the DGCL confers
jurisdiction to the Court of Chancery; or (iv) any action asserting a claim governed by the internal affairs doctrine. Although the Company has included a choice of forum provision in its Certificate of Incorporation, it is possible that a
court could rule that such provision is inapplicable or unenforceable. In addition, this provision would not affect the ability of the Company's stockholders to seek remedies under the federal securities laws. Although the Company believes this
provision benefits the Company by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against the Company's directors and
officers.
Item 8.01
Other Information.
Forward-Looking Statements
This
Current Report on Form
8-K,
including Exhibit 99.2 furnished herewith, contains certain statements that are, or may be deemed to be, "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical facts, included in this Current Report on Form
8-K,
including Exhibit 99.2
furnished herewith, that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. We have based these
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forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. These forward-looking
statements relate, in part, to (i) the potential adverse effects of the chapter 11 cases on the Company's liquidity, results of operations or business prospects, (ii) the ability to execute the Company's business plan and
(iii) the uncertainty that any trading market for the Class A Common Stock will exist or develop in the
over-the-counter
markets and are subject to a number of
risks, uncertainties and assumptions, including, among other things, the risk factors discussed in the Company's most recent Annual Report on Form
10-K
and Quarterly Reports on Form
10-Q
under the caption "Risk Factors," as well as in other reports filed from time to time by the Company with the SEC, most of which are beyond our control. The words "believe," "may,"
"estimate," "continue," "anticipate," "intend," "plan," "expect," "indicate" and similar expressions are intended to identify forward-looking statements. Although we believe that
the forward-looking statements contained in this Current Report on Form
8-K,
including Exhibit 99.2 furnished herewith, are based upon reasonable assumptions, the forward-looking events and circumstances
discussed in this Current Report on Form
8-K,
including Exhibit 99.2 furnished herewith, may not occur and actual results could differ materially from those anticipated or implied in the forward-looking
statements. Any forward-looking statement speaks only as of the date on which such statement is made and we undertake no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or
otherwise.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number
Description
2.1
First Amended Chapter 11 Plan of Reorganization, as Immaterially Modified as of January 
28, 2019 of PetroQuest Energy, Inc. and its Debtor Affiliates (incorporated by reference to Exhibit 2.1 to Form
8-K
filed on January 31, 2019).
3.1
Amended and Restated Certificate of Incorporation of PetroQuest Energy, Inc.
3.2
Amended and Restated Bylaws of PetroQuest Energy, Inc.
4.1
Indenture dated as of February 8, 2019, among PetroQuest Energy, Inc., the guarantors party thereto and Wilmington Trust, N.A., as the trustee and collateral agent.
4.2
Form of 10% Senior Secured PIK Note due 2024 (
included in Exhibit 4.1
)
4.3
Registration Rights Agreement dated as of February 8, 2019, by and among PetroQuest Energy, Inc. and the holders party thereto.
10.1
Term Loan Agreement dated as of February 
8, 2019, by and among PetroQuest Energy, LLC, as borrower, PetroQuest Energy, Inc., as parent, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent.
10.2
Intercreditor Agreement dated as of February 
8, 2019, by and among Wells Fargo Bank, National Association, as intercreditor agent, Wilmington Trust, National Association, as collateral agent, PetroQuest Energy, Inc. and PetroQuest Energy, L.L.C.
10.3
Form of Executive Employment Agreement.
10.4
Form of Termination Agreement.
10.5
Form of Indemnification Agreement.
10.6
PetroQuest Energy, Inc. 2019 Long Term Incentive Plan.
10.7
Form of Restricted Stock Units Award Agreement.
10.8
Form of Stock Option Award Agreement.
99.1
Order Confirming First Amended Chapter 11 Plan of Reorganization, as Immaterially Modified as of January 
28, 2019, of PetroQuest Energy, Inc. and Its Debtor Affiliates (incorporated by reference to Exhibit 99.1 of Form
8-K
filed January 31, 2019).
99.2
News Release dated February 11, 2019.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: February 11, 2019
PETROQUEST ENERGY, INC.
/s/ J. Bond Clement
J. Bond Clement
Executive Vice President, Chief Financial Officer and Treasurer
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