-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U70OXaW+pwIZ3QHXtdr4QcX8kHEy18tNcLBWRX9sNqJgp28ES77Iyp/Rf1Q9HklF VZGBLKsGJPhl5BLTkMAK3A== 0000921749-97-000136.txt : 19971217 0000921749-97-000136.hdr.sgml : 19971217 ACCESSION NUMBER: 0000921749-97-000136 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19971216 SROS: NASD GROUP MEMBERS: ACF INDUSTRIES HOLDING CORP. GROUP MEMBERS: ACF INDUSTRIES, INCORPORATED GROUP MEMBERS: ASTRAL CORP. GROUP MEMBERS: BUFFALO INVESTORS CORP. GROUP MEMBERS: CARL C. ICAHN GROUP MEMBERS: CIGAS CORP. GROUP MEMBERS: GASCON PARTNERS GROUP MEMBERS: HIGH RIVER LIMITED PARTNERSHIP GROUP MEMBERS: HIGHCREST INVESTORS CORP. GROUP MEMBERS: ICAHN CARL C ET AL GROUP MEMBERS: RIVERDALE LLC GROUP MEMBERS: STARFIRE HOLDING CORPORATION SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL ENERGY GROUP INC CENTRAL INDEX KEY: 0000870756 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 581922764 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-44333 FILM NUMBER: 97739020 BUSINESS ADDRESS: STREET 1: 1400 ONE ENERGY SQ STREET 2: 4925 GREENVILLE AVE CITY: DALLAS STATE: TX ZIP: 75206 BUSINESS PHONE: 2146929211 MAIL ADDRESS: STREET 1: 4925 GREENVILLE AVE STREET 2: SUITE 1400 CITY: DALLAS STATE: TX ZIP: 75206 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ICAHN CARL C ET AL CENTRAL INDEX KEY: 0000921669 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 100 SOUTH BEDFORD ROAD CITY: MT KISCO STATE: NY ZIP: 10549 BUSINESS PHONE: 9142427700 MAIL ADDRESS: STREET 1: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 SC 13D/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 5) National Energy Group, Inc. (Name of Issuer) Common Stock (Title of Class of Securities) 163581 210 (CUSIP Number) Marc Weitzen, Esq. Gordon Altman Butowsky Weitzen Shalov & Wein 114 West 47th Street, 20th Floor New York, New York 10036 (212) 626-0800 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 11, 1997 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /. Check the following box if a fee is being paid with the statement. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7). NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP No. 163581 210 1 NAME OF REPORTING PERSON High River Limited Partnership S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* WC;AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 8,547,044 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 8,547,044 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,547,044 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.9% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 163581 210 1 NAME OF REPORTING PERSON Riverdale LLC S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* WC;AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 8,547,044 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 8,547,044 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,547,044 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.9% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 163581 210 1 NAME OF REPORTING PERSON Gascon Partners S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* WC;AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 300,000 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 300,000 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 300,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7% 14 TYPE OF REPORTING PERSON* PN SCHEDULE 13D CUSIP No. 163581 210 1 NAME OF REPORTING PERSON Cigas Corp. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 300,000 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 300,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 300,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 163581 210 1 NAME OF REPORTING PERSON Astral Gas Corp. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 300,000 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 300,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 300,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 163581 210 1 NAME OF REPORTING PERSON ACF Industries, Incorporated S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION New Jersey NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 300,000 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 300,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 300,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 163581 210 1 NAME OF REPORTING PERSON ACF Industries Holding Corp. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 300,000 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 300,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 300,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 163581 210 1 NAME OF REPORTING PERSON Highcrest Investors Corp. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 300,000 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 300,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 300,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 163581 210 1 NAME OF REPORTING PERSON Buffalo Investors Corp. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 300,000 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 300,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 300,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 163581 210 1 NAME OF REPORTING PERSON Starfire Holding Corporation S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 300,000 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 300,000 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 300,000 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.7% 14 TYPE OF REPORTING PERSON* CO SCHEDULE 13D CUSIP No. 163581 210 Page __ of __ Pages 1 NAME OF REPORTING PERSON Carl C. Icahn S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) // 3 SEC USE ONLY 4 SOURCE OF FUNDS* AF 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) // 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 7 SOLE VOTING POWER 0 8 SHARED VOTING POWER 8,847,044 9 SOLE DISPOSITIVE POWER 0 10 SHARED DISPOSITIVE POWER 8,847,044 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 8,847,044 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* // 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 19.6% 14 TYPE OF REPORTING PERSON* IN SCHEDULE 13D Item 1. SECURITY AND ISSUER This Schedule 13D filed with the U.S. Securities and Exchange Commission ("SEC") on July 27, 1995, by High River Limited Partnership, a Delaware limited partnership ("High River"), Riverdale Investors Corp. Inc., a Delaware corporation ("Riverdale"), Gascon Partners, a New York general partnership ("Gascon Partners"),Cigas Corp., a Delaware corporation("Cigas") Astral Gas Corp., a New York corporation ("Astral"), ACF Industries, Incorporated, a New Jersey corporation ("ACF"), ACF Industries Holding Corp., a Delaware corporation ("ACF Holding"), Highcrest Investors Corp., a Delaware corporation ("Highcrest"), Buffalo Investors Corp., a New York corporation ("Buffalo") and Starfire Holding Corporation, a Delaware corporation ("Starfire") (collectively, the "Registrants") amended on July 22, 1996, August 9, 1996, September 4, 1996 and June 17, 1997 is further amended to furnish the additional information set forth herein. All capitalized terms contained herein but not otherwise defined shall have the meanings ascribed to such terms in the original Schedule 13D previously filed by the Registrants. Item 2. IDENTITY AND BACKGROUND Item 2 is hereby amended by adding the following: The persons filing this statement are Gascon Partners, a New York general partnership ("Gascon Partners"),Cigas Corp., a Delaware corporation("Cigas") Astral Gas Corp., a New York corporation ("Astral"), ACF Industries, Incorporated, a New Jersey corporation ("ACF"), ACF Industries Holding Corp., a Delaware corporation ("ACF Holding"), Highcrest Investors Corp., a Delaware corporation ("Highcrest"), Buffalo Investors Corp., a New York corporation ("Buffalo") and Starfire Holding Corporation, a Delaware corporation ("Starfire"). The principal business address and the address of the principal office of the Registrants is 100 South Bedford Road, Mount Kisco, New York 10549, with the exception of ACF, whose principal business address and the address of its principal office is 3301 Rider trail South, Earth City, Missouri 63045. Astral and Cigas are the general partners of Gascon Partners. Cigas is wholly-owned by Carl C. Icahn. Astral is a wholly-owned subsidiary of ACF. ACF is a wholly-owned subsidiary of ACF Holding. ACF Holding is a wholly-owned subsidiary of Highcrest. Highcrest is 99.34% owned by Buffalo and the remainder is owned by Carl C. Icahn Foundation. Buffalo is a wholly-owned subsidiary of Starfire. Starfire is wholly-owned by Carl C. Icahn. Registrants may be deemed to be a "group" within the meaning of Rule 13d-5 promulgated under the Securities Exchange Act of 1934, as amended (the "Act"). Item 5. INTEREST IN SECURITIES OF ISSUER Item 5 is hereby amended by deleting the first paragraph inserting the following in place thereof: As of the close of business on December 11, 1997, Registrants may be deemed to beneficially own in the aggregate 8,847,044 shares of common stock, par value $.01 per share, of the Issuer (the "NEG Common Stock"), representing approximately 19.6% (computed in accordance with the rule 13d-3(d)(1) of the Issuer's outstanding common stock as of November 10, 1997 in the Issuer's most recent filing on Form 10-Q dated November 14, 1997 filed with the Securities and Exchange Commission. Registrants have direct beneficial ownership of the Common Stock as follows: Number of Shares Approximate Percentage Name NEG Common Stock of Outstanding Shares (computed in accordance with the rue 13d-3(d)(1)) High River 8,547,044 18.9% Gascon Partners 300,000 0.7 % The following table sets forth all transactions with respect to Shares effected during the past sixty days by the Registrants. The transactions set forth below reflect High River's purchase of Shares offered by the Issuer in a public offering and Gascon Partners's receipt of a warrant to purchase 300,000 shares of common stock. TRADE DATE PRICE PER SHARE ($) SHARES PURCHASE BY HIGH RIVER 12/11/97 3.626 290,000 3.5 29,500 3.53 15,000 WARRANT TO PURCHASE SHARES OF COMMON STOCK 07/11/97 * 300,000 * The registrants received the warrant in connection the purchase of interests in oil and gas programs. The transaction is described in the Letter Agreement Prospect Participation NEG Exploration Prospects and the Warrant to Purchase 300,000 of Common Stock of National Energy Group, Inc., appended here as Exhibits 2 and 3 respectively and incorporated by reference. ITEM 6. CONTRACT, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Item 6 is hereby amended by adding the following: Registrants are party to the revised Joint Filing Agreement appended here as Exhibit 1, Letter Agreement Prospect Participation NEG Exploration Prospects ("Letter Agreement") appended here as Exhibit 2 and incorporated by reference, and the Warrant to Purchase 300,000 of Common Stock of National Energy Group, Inc "(Warrant") appended here as Exhibit 3 and incorporated by reference. The Letter Agreement expresses the mutual understanding between the Issuer and Icahn Associates Corp. with respect to participation in various oil and gas exploration prospects of the Issuer. The Warrant isued to Gascon Partners is a warrant to purchase three hundred thousand (300,000) shares of Common Stock, $0.01 par value of the Isuer at a price of three dollars ($3.00) per share (the "Exercise Prise"), subject to certain adjustment as set out in the Warrant. ITEM 7. MATERIALS TO BE FILED AS EXHIBITS Item 7 is hereby amended by adding the following: Exhibit 1. Joint Filing Agreement Exhibit 2. Letter Agreement Prospect Participation NEG Exploration Prospects Exhibit 3. Warrant to Purchase 300,000 Shares of Common Stock of National Energy Group, Inc. SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: December 12, 1997 RIVERDALE LLC By: /s/ Carl C. Icahn Carl C. Icahn Its: Member HIGH RIVER LIMITED PARTNERSHIP By: RIVERDALE LLC Its: General Partner By: /s/ Carl C. Icahn Carl C. Icahn Its: Member GASCON PARTNERS By: CIGAS CORP. Its: Managing General Partner By: /s/ Edward e. Mattner Edward E. Mattner Its: President CIGAS CORP. By: /s/ Edward E. Mattner Edward E. Mattner Its: President ASTRAL CORP. By: /s/ Edward E. Mattner Edward E. Mattner Its: President [Signature Page of 13D Amendment No. 5 with respect to National Energy Group, Inc.] ACF INDUSTRIES, INCORPORATED By: /s/ James J. Unger James J. Unger Its: Vice Chairman of the Board ACF INDUSTRIES HOLDING CORP. By: /s/ Richard T. Buonato Richard T. Buonato Its: Vice President and Secretary HIGHCREST INVESTORS CORP. By: /s/ Richard T. Buonato Richard T. Buonato Its: Senior Vice President and Treasurer BUFFALO INVESTORS CORP. By:/s/Edward E. Mattner Edward E. Mattner Its: President and Treasurer STARFIRE HOLDING CORPORATION By: /s/ Richard T. Buonato Richard T. Buonato Its: Vice President, Treasurer and Controller Carl C. Icahn By: /s/Carl C. Icahn Carl C. Icahn [Signature Page of 13D Amendment No. 5 with respect to National Energy Group, Inc.] EX-99 2 EXHIBIT 1 JOINT FILING AGREEMENT In accordance with Rule 13d-1(f) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the common stock, par value $.01 per share of National Energy Corp. and further agree that this Joint Filing Agreement be included as an Exhibit to such joint filings. In evidence thereof, the undersigned, being duly authorized, have executed this Joint Filing Agreement this 12th day of December, 1997. RIVERDALE LLC By: /s/ Carl C. Icahn Carl C. Icahn Its: Member HIGH RIVER LIMITED PARTNERSHIP By: RIVERDALE LLC Its: General Partner By: /s/ Carl C. Icahn Carl C. Icahn Its: Member GASCON PARTNERS By: CIGAS CORP. Its: Managing General Partner By: /s/ Edward e. Mattner Edward E. Mattner Its: President [Signature Page of Joint Filing Agreement for Schedule 13 D with respect to National Energy Group, Inc.] CIGAS CORP. By: /s/ Edward E. Mattner Edward E. Mattner Its: President ASTRAL CORP. By: /s/ Edward E. Mattner Edward E. Mattner Its: President ACF INDUSTRIES, INCORPORATED By: /s/ James J. Unger James J. Unger Its: Vice Chairman of the Board ACF INDUSTRIES HOLDING CORP. By: /s/ Richard T. Buonato Richard T. Buonato Its: Vice President and Secretary HIGHCREST INVESTORS CORP. By: /s/ Richard T. Buonato Richard T. Buonato Its: Senior Vice President and Treasurer BUFFALO INVESTORS CORP. By:/s/Edward E. Mattner Edward E. Mattner Its: President and Treasurer [Signature Page of Joint Filing Agreement for Schedule 13 D with respect to National Energy Group, Inc.] STARFIRE HOLDING CORPORATION By: /s/ Richard T. Buonato Richard T. Buonato Its: Vice President, Treasurer and Controller Carl C. Icahn By: /s/Carl C. Icahn Carl C. Icahn [Signature Page of Joint Filing Agreement for Schedule 13 D with respect to National Energy Group, Inc.] EX-99 3 EXHIBIT 2 RE: LETTER AGREEMENT PROSPECT PARTICIPATION NEG EXPLORATION PROSPECTS Dear Mr. Icahn: Pursuant to our discussions, this Letter Agreement shall act to express the mutual understanding and agreement by and between National Energy Group, Inc. ("NEG") and Icahn Associates Corp. ("Icahn") with respect to participation in various oil and gas exploration prospects of NEG (individually, "Prospect" and collectively, "Prospects"). NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. PROSPECTS. NEG and Icahn agree that Icahn shall participate as set forth herein in certain Prospects to be drilled by NEG. Notwithstanding anything to the contrary, it is the intention of the parties, unless otherwise specifically agreed in writing, the term "Prospect" as used herein shall include all exploration and all available development Prospects generated or acquired by NEG, its agents, advisors or consultants during the term hereof. 2. PARTICIPATION. The parties agree that Icahn's participation in any Prospect shall be on a promoted basis of one-third (1/3) for one-fourth (1/4) interest to the casing point of the initial well in each Prospect, which shall include the actual prospect fees and land acquisition costs of each Prospect. The interest acquired by Icahn hereunder shall not be burdened by any back-in interest in favor of Sandefer Oil & Gas, Inc., its successors and assigns. It is further understood and agreed that in the event NEG should sell any Prospect under more favorable terms to another party purchaser other than Icahn, then in such event, Icahn shall be entitled to participate in each Prospect under the more favorable terms and conditions as any other such purchaser. Mr. Carl C. Icahn c/o Icahn Associates Corp. July 11, 1997 3. COMMITMENT. Through September 30, 1998, Icahn agrees to acquire, and NEG agrees to offer participation to Icahn in each of NEG's Prospects for an interest up to three-eighths (3/8) of one hundred percent (100%) before casing point for any such Prospect and all development activity deriving therefrom; if more is available, it shall be offered by NEG and may be accepted by Icahn or rejected. The obligation and commitment of Icahn described herein shall be an aggregate amount of TEN MILLION DOLLARS ($10,000,000) during the term hereof. NEG agrees that it will invest in and retain at least an amount equal to the amount invested by Icahn in each well in which Icahn participates, provided, however, that NEG may transfer all or a portion of its interest if it first obtains a firm written bid for the interest from a party whose identity it makes known to Icahn, which if accepted would be a binding agreement to sell on the terms contained in such bid, and if it then offers Icahn the right for a period of fifteen (15) days to either (i) purchase the applicable portion of the interest at the same price as contained in the firm bid or (ii) sell the same portion of Icahn's entire interest in such well to the bidder at the same price and on the same terms as contained in the bid. If Icahn chooses alternative (i), then NEG shall sell to Icahn on the basis contained in the firm bid and if Icahn chooses alternative (ii), then NEG shall sell the applicable portion of its interest and shall sell, for Icahn, the applicable portion of Icahn's interest to the firm bidder on the basis set forth in the firm bid. If Icahn chooses neither alternative, then NEG is free, for a period of ninety (90) days, to sell the applicable portion of its interest to the firm bidder on a basis no more favorable to it than contained in the firm bid. 4. PREFERENTIAL RIGHT. If at any time Icahn decides to sell a portion of its interest in any Prospect to any party (other than to a subsidiary or affiliate of Icahn, in which case there shall be an unrestricted right to do so), it shall first notify NEG in writing that such interest is for sale (the "Offered Interest"). NEG shall then have fifteen (15) days from receipt of such notice in which to make an offer in writing to purchase the Offered Interest. NEG's failure to timely respond in writing within such fifteen (15) day period shall be deemed by Icahn to be an election by NEG not to make an offer to purchase the Offered Interest. Upon receipt of NEG's offer to purchase the Offered Interest, Icahn shall then have fifteen (15) working days thereafter in which to accept or reject in writing NEG's offer. Icahn's failure to timely respond in writing within such ten (10) working day period shall be deemed by NEG to be an election by Icahn to accept NEG's offer to purchase the Offered Interest. In the event Icahn gives NEG timely notice in writing of its rejection of NEG's offer to purchase the Offered Interest, Icahn shall thereafter, for a period of ninety (90) days, be free to offer the Offered Interest to any other party. In the event that thereafter Icahn desires to transfer the Offered interest to any other party, Icahn must first give NEG the right for a period of ten (10) days to exceed the bid, in writing, for the Offered Interest. The parties hereto agree that notwithstanding any other provision contained herein, this Paragraph 4 shall apply to successors and assigns of NEG. NEG covenants and agrees that no agreements relating to the subject matter hereof shall diminish the rights granted in Paragraphs 3 and 4 hereof. Page 2 of 5 Mr. Carl C. Icahn c/o Icahn Associates Corp. July 11, 1997 5. WARRANTS. In consideration of the Preferential Rights granted in Paragraph 4 and the commitment of the amount of TEN MILLION DOLLARS ($10,000,000) contained herein, NEG agrees that it shall hereby grant to Icahn certain warrants to purchase THREE HUNDRED THOUSAND (300,000) shares of common stock of NEG (the "Warrants") as more fully described below: 5.1 NUMBER OF WARRANTS. The Warrants shall become exercisable on the earlier of (i) December 31, 1997, or (ii) as to each block of ONE HUNDRED FIFTY THOUSAND (150,000) warrants where FIVE MILLION DOLLARS ($5,000,000) has been invested by Icahn in the Prospects. 5.2 EXERCISE PRICE. The exercise price per share of each Warrant shall be equal to THREE DOLLARS ($3.00) per share for each share of NEG Common Stock. 5.3 EXPIRATION DATE; FORM. Warrants earned hereunder shall expire five (5) years from the date hereof, and any Warrants not so exercised by such date shall become null and void of all rights and shall cease to exist. The Warrants shall be in the form of EXHIBIT "A" attached hereto and incorporated herein. The Warrants and warrant shares shall be subject to the Registration Rights Agreement as set forth on EXHIBIT "A-1" attached hereto and incorporated herein. 6. RELATED AGREEMENTS. The parties hereto further agree that all operations on the jointly owned acreage shall be conducted pursuant to the terms of a Participation Agreement and AAPL Form 610 1982 Joint Operating Agreement, as modified, which shall (i) be mutually agreed upon by all working interest participants in the Prospect (ii) designate NEG as operator and (iii) contain a mutually agreeable area of mutual interest to include the Prospect. In the event that there is any conflict between this Letter Agreement and any such other agreement, the terms of this Letter Agreement shall govern. 7. OTHER COVENANTS. 7.1 NEG shall use its best efforts to sell Icahn's proportionate share of the oil and gas produced from any well if Icahn so requests, but only for such reasonable periods of time as are consistent with the minimum needs of the industry under the particular circumstances, but in no event for a period in excess of one (1) year. Such request shall be made in writing, within thirty (30) days of the commencement of oil or gas production from the aforementioned well. 7.2 TITLE: i. Upon the initial payment for participation in any Prospect, Icahn's interest in the right, title and interest in the property or leasehold underlying the Prospect acquired by NEG shall be conveyed and assigned to Icahn in any name, as directed by Icahn. ii. NEG shall provide Icahn with timely and appropriate title as is usual and customary in the industry for drilling operations as contemplated herein. Page 3 of 5 Mr. Carl C. Icahn c/o Icahn Associates Corp. July 11, 1997 7.3 Prior to committing to any single Prospect, NEG shall furnish to Icahn all relevant reports or documents relating to that Prospect (including the insurance coverage provided by NEG). 7.4 NEG represents and warrants that it is not an "integrated oil company" as defined in Section 291(b) of the Internal Revenue Code of 1986, as amended, and further covenants that NEG shall not become an integrated oil company for the duration of this Agreement (including any extensions thereof) and shall indemnify and hold Icahn and its affiliates harmless against any loss of all benefits, including tax benefits, in the event either the representation and warranty or the covenant in this Paragraph 7.4 is breached. 8. CHOICE OF LAW. THIS LETTER AGREEMENT, THE LEGAL RELATIONSHIP OF THE PARTIES AND ALL RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO THE LAWS OF ANY OTHER JURISDICTION. 9. NOTICES. Any notice required hereunder shall be in writing; delivered to or sent by U.S. Mail, postage pre-paid, or nationally recognized commercial carrier service, postage or delivery charges pre-paid, or by facsimile with a copy delivered to the U.S. Mail, postage pre-paid, addressed as follows (or such other address as may be specified by five (5) days prior written notice to the other party hereto): IF TO NEG: IF TO ICAHN: National Energy Group, Inc. Icahn Associates Corp. 4925 Greenville Avenue 767 Fifth Avenue Suite 1400 47th Floor Dallas, Texas 75206- 4095 New York, New York 10153 Attn: Mr. William T. Jones Attn: Mr. Carl C. Icahn Senior Vice President President Phone: (214) 692-9211 Phone: (212) 702-4333 Fax: (214) 692-5055 Fax: (212) 750-5807 10. ASSIGNMENT. This Letter Agreement shall inure to the benefit of and be binding upon NEG and Icahn and their respective successors and assigns. 11. COMPLETENESS. This Letter Agreement supersedes all prior written or oral ********************************** agreements and understandings between the parties and constitutes the complete agreement between the parties with respect to the subject matter hereof. This Letter Agreement cannot be modified or amended except by written instrument duly executed by NEG and Icahn. Page 4 of 5 Mr. Carl C. Icahn c/o Icahn Associates Corp. July 11, 1997 If the foregoing expresses our mutual understanding and agreement, please so indicate by executing in the appropriate space below and returning one (1) fully executed copy to the undersigned. Sincerely, National Energy Group, Inc. /s/ Miles D. Bender -------------------------------- Miles D. Bender President MDB:ljg ACCEPTED AND AGREED THIS 11 DAY OF JULY, 1997. ICAHN ASSOCIATES CORP. - - --------------------------------- By: Edward E. Mattner -------------------------- Title: President -------------------------- Page 5 of 5 NEITHER THIS WARRANT NOR THE SECURITIES RECEIVED UPON EXERCISE OF THIS WARRANT HAS BEEN REGISTERED OR QUALIFIED UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, THIS WARRANT AND THE SECURITIES RECEIVED UPON EXERCISE OF THIS WARRANT MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED OR QUALIFIED UNDER SAID ACT AND ALL APPLICABLE STATE SECURITIES LAWS OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE WARRANTS AND THE SECURITIES RECEIVED UPON EXERCISE OF THIS WARRANT, AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS AVAILABLE AND SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION DOES NOT VIOLATE THE PROVISIONS OF THE ACT OR APPLICABLE LAWS. EX-99 4 EXHIBIT 3 NATIONAL ENERGY GROUP, INC. WARRANT TO PURCHASE 300,000 SHARES OF COMMON STOCK OF NATIONAL ENERGY GROUP, INC. This Warrant (the "Warrant") is issued to Gascon Partners, a New York general partnership ("Holder") and Holder agrees by acceptance hereof that this Warrant is subject to the terms and conditions contained herein and the terms and conditions of that certain Letter Agreement dated July 11, 1997 between National Energy Group, Inc. (the "Company") and Holder (the "Letter Agreement"). This Warrant is a warrant to purchase THREE HUNDRED THOUSAND (300,000) shares of Common Stock, $0.01 par value (the "Common Stock") of the Company at a price of THREE DOLLARS ($3.00) per share (the "Exercise Price"), subject to adjustment as provided herein. This Warrant shall expire on July 11, 2002 (the "Expiration Date") and shall become exercisable on the earlier of (i) December 31, 1997, or (ii) as to each block of ONE HUNDRED FIFTY THOUSAND (150,000) warrants where FIVE MILLION DOLLARS ($5,000,000) has been invested by Gascon Partnership, a New York partnership, as provided in the Letter Agreement. This Warrant shall be void and all rights of Holder under this Warrant shall cease if this Warrant shall not have been duly exercised on or prior to the Expiration Date. This Warrant shall not entitle Holder to any rights other than as set forth herein, and Holder will not have any of the rights, privileges or liabilities of a stockholder of the Company prior to the exercise of this Warrant. The number of shares of Common Stock as to which this Warrant may be exercised and the Exercise Price from time to time in effect shall be adjusted from time to time as follows: (A) In case the Company shall (i) subdivide its shares of outstanding Common Stock into a larger number of shares of Common Stock, (ii) combine shares of its outstanding Common Stock into a smaller number of shares of Common Stock or (iii) issue stock as a dividend on its Common Stock; then Holder, after the close of business on the effective date of such subdivision, combination or stock dividend, as the case may be (the close of business time being hereinafter in this subparagraph (A) referred to as "such record date"), shall be entitled to receive, upon actual exercise of this Warrant, the aggregate number and kind of shares of capital stock of the Company which, if this Warrant had been exercised immediately prior to such record date at the Exercise Price then in effect, it would have been entitled to receive by virtue of such subdivision, combination or stock dividend; and the Exercise Price shall be deemed to have been adjusted after such record date to apply to such aggregate number and kind of shares. Such adjustment shall be made whenever any of the events listed above shall occur. (B) No notification to Holder of any adjustment in the exercise price otherwise required by this subparagraph (B) to be made must be made, if such adjustment (plus any other adjustments not heretofore made since the time of the last notice to Holder of an adjustment, if any) would not require any increase or decrease of five percent (5%) or more in the Exercise Price; provided, however, that upon exercise of this Warrant, all adjustments shall be made in calculating the exercise rights of Holder. Whenever the Exercise Price is adjusted by five percent (5%) or more since the time of the last notice to Holder of an adjustment, if any, as herein provided, the Company shall promptly mail to Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. (C) In the event that at any time, as a result of an adjustment, Holder shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock, the number of such other shares so receivable upon exercise of this Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares of Common Stock contained in subparagraphs (A) and (B), above, and the other provisions of this subparagraph (C) with respect to the shares of Common Stock shall apply on like terms to any such other shares. (D) In case of any reclassification of the Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value), any consolidation of the Company with, or merger of the Company into, any other person, any merger of any person into the Company (other than a merger that does not result in any reclassification of, or change in the outstanding shares of Common Stock), any sale or transfer of all or substantially all of the assets of the Company (other than a sale-lease back, collateral assignment, mortgage or other similar financing transaction), or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or other properties, then Holder shall have the right thereafter, during the period this Warrant shall be exercisable, to exercise this Warrant for the kind and amount of securities, cash or other property receivable upon such reclassification, consolidation, merger, sale, transfer or share exchange by a holder of the number of shares of Common Stock into which this Warrant might have been exercised immediately prior to such reclassification, consolidation, merger, sale, transfer or share exchange. (E) In case the Company, at any time while this Warrant is outstanding, shall issue shares of Common Stock, warrants or rights to acquire Common Stock or securities convertible into Common Stock (excluding (i) those issued as a dividend or distribution with respect to Series B, Series C, Series D or Series E Preferred Stock so long as the securities are additional shares of Series B, Series C, Series D or Page 2 Series E Preferred Stock and (ii) options or shares of Common Stock or other common stock issued to officers, employees or directors so long as the number issued to officers, employees and directors in any one year does not exceed five percent (5%) of the number of shares of Common Stock outstanding on January 1st of such year) at a price per Common Stock share purchased, purchasable, or issuable upon conversion that is less than the Exercise Price, then the Exercise Price at which each share of Common Stock at which this Warrant shall thereafter be exercisable shall be reduced by multiplying the Exercise Price in effect on the date of issuance of such shares, warrants, rights or convertible securities by a fraction, of which the denominator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding on the date of issuance of such shares, warrants, rights or convertible securities plus the number of additional shares of Common Stock issued, offered for subscription or purchase or issuable upon conversion, and of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding on the date of issuance of such shares, warrants, rights or convertible securities plus the number of shares of Common Stock that the aggregate offering price of the total number of shares so offered, issued, or issuable, or, with respect to convertible securities, the aggregate consideration received by the Company for the convertible securities, would purchase at the prior Exercise Price. Such adjustment shall be made whenever shares, warrants, rights or convertible securities are issued, and shall become effective immediately after such issuance date. However, upon the expiration of any warrant, right or conversion right to purchase Common Stock, the issuance of which resulted in an adjustment in the Exercise Price of this Warrant pursuant to this subparagraph (E), if any such warrant, right or convertible rights shall expire and shall not have been exercised, the Exercise Price per share of Common Stock at which this Warrant shall thereafter be exercisable shall immediately upon such expiration be recomputed and effective immediately upon such expiration be increased to the price which it would have been (but reflecting any other adjustments in the Exercise Price made pursuant to the provisions of this subparagraph (E) after the issuance of such warrants, rights or convertible securities) had the adjustment of the Exercise Price made upon the issuance of such warrants, rights or convertible securities been made on the basis of offering for subscription or purchase only that number of shares of Common Stock actually purchased upon the exercise of the warrants or rights actually exercised or the conversion of the convertible securities actually converted. For purposes of this subparagraph (E), the term Common Stock shall include (i) any common equity security into which the Common Stock is reclassified or for which it is exchanged, or (ii) any common equity security of the Company that has equal or superior voting rights with the Common Stock. (F) In case the Company, at any time while this Warrant is outstanding, shall distribute to all holders of Common Stock evidences of its indebtedness or assets (excluding cash dividends or cash distributions paid out of earned surplus) or rights to subscribe (excluding those referred to in subparagraph (E) above) then in each such case the Exercise Price per share of Common Stock at which this Warrant shall thereafter be exercisable shall be determined by multiplying the Exercise Price in effect prior to the record date fixed for determination for stockholders entitled to receive such distribution by a fraction, of which the denominator shall be the Closing Price of a share of Common Stock determined as of the record date mentioned above, and (of which the numerator shall be such Closing Price of a share of Common Stock, less the then fair market value per share (as determined by the Board of Directors of the Company in good faith, whose determination shall be conclusive if made in good faith and shall be described in a statement provided to Holder) of the portion of assets or evidences of indebtedness so distributed or of such subscription rights. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above. (G) Upon each adjustment of the Exercise Price as provided for herein, the Holder of this Warrant shall thereafter (until another such adjustment) be entitled to purchase, at the adjusted Exercise Price on the date purchase rights under this Warrant are exercised, the number of shares of Common Stock Page 3 determined by (a) multiplying the number of purchasable shares hereunder immediately prior to the adjustment of the Exercise Price by the Exercise Price in effect immediately prior to such adjustment, and (b) dividing the product so obtained by the adjusted Exercise Price in effect on the date of such exercise. (H) In case: 1. the Company shall declare a dividend (or any other distribution) on the Common Stock payable otherwise than in cash out of its earned surplus; or 2. the Company shall declare a special nonrecurring cash dividend on or a redemption of its Common Stock; or 3. the Company shall authorize the granting to the holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any other rights; or 4. the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock of the Company (other than a subdivision or combination of the outstanding shares of Common Stock), any consolidation or merger to which the Company is party or any sale or transfer of all or substantially all of the assets of the Company; or 5. of the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then the Company shall, at least 10 days prior to the applicable record date hereinafter specified, contact by telephone and cause to be mailed to Holder at its last address as it shall appear upon the stock books of the Company, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution, redemption, rights or warrants are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. (I) In case at any time conditions shall arise by reason of action taken by the Company, which, in the opinion of the Board of Directors of the Company, are not adequately covered by the other provisions hereof and which might materially and adversely affect the rights of Holder, or in case at any time any such conditions are expected to arise by reason of any action contemplated by the Company, the Board of Directors of the Company shall appoint a firm of independent certified public accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Company), who shall give their opinion as to the adjustment, if any (not inconsistent with the standards herein), of the Exercise Price (including, if necessary, any adjustment as to the securities to be received thereafter upon exercise of this Warrant) which is or would be required to preserve without dilution the rights of Holder. The Board of Directors of the Company may, in its judgment, make the adjustment recommended upon the receipt of such opinion; provided, however, that no adjustment pursuant to this subparagraph (I) of the Exercise Price shall be made which in the opinion of the accountant or firm of Page 4 accountants giving the aforesaid opinion would result in an increase of the Exercise Price to more than the Exercise Price then in effect. As used above, the term "Closing Price" on any day shall mean the higher of (i) the reported closing sales price per share of Common Stock on the principal national securities exchange or the NASDAQ National Market on which the shares of Common Stock are at the time listed or traded on such day or (ii) the average of the closing sales prices for the twenty Trading Days prior to such day. In case no such sale takes place on a day, the Closing Price shall be the average of the reported closing bid and asked prices, or, if the shares of Common Stock shall not be so listed, the average of the high bid and low ask prices in the over-the-counter market as reported by the National Association of Securities Dealers' Automated Quotation System, or, if not so reported, as reported by the National Quotation Bureau, Incorporated, or any successor thereof, or, if not so reported, the average of the closing bid and asked prices as furnished by any member of the National Association of Securities Dealers, Inc. selected from time to time by the Company for that purpose. The term "Trading Day" shall mean a day on which the principal national securities exchange or the NASDAQ National Market on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to, trading on any national securities exchange or the NASDAQ National Market, a Monday, Tuesday, Wednesday, Thursday, or Friday on which banking institutions in the City of Dallas, State of Texas, are not authorized or obligated by law or executive order to close. The Company shall at all times after July 11, 1997, reserve and keep available, free from preemptive rights, out of its authorized but unissued shares of Common Stock solely for the purpose of issuance upon the exercise of this Warrant the full number of shares of Common Stock then deliverable upon the exercise of this Warrant. The Company covenants and agrees that all shares which may be issued upon the exercise of this Warrant will, upon issuance, be legally and validly issued, fully paid and nonassessable and free from all taxes, liens and charges of any nature whatsoever. This Warrant may be exercised by filling out and signing the Warrant Exercise Notice and mailing or delivering the Warrant Exercise Notice to the Company in time to reach the Company by the Expiration Date, accompanied by payment of the full applicable Exercise Price. Payment of the Exercise Price must be made in United States funds (by certified check) payable to the order of the Company. Common Stock certificates will be issued as soon as practicable after exercise and payment of the Exercise Price for the shares of Common Stock so purchased. If the Warrant Exercise Notice is mailed by first class mail, registered or certified, postage prepaid, and properly addressed to National Energy Group, Inc., 4925 Greenville Ave., Suite 1400, Dallas, Texas, 75206, or, to such other address as the Company may have specified in a notice duly given to Holder, then the Warrant Exercise Notice will be presumed to be received by the Company three (3) business days after the date so mailed. Subject to the provisions of the legend on the first page of this Warrant, this Warrant is transferable by Holder, in whole or in part (provided that any partial transfer shall be for a whole number of shares of Common Stock), and upon delivery of this Warrant to the Company with evidence of such transfer by Holder reasonably satisfactory to the Company, the Company shall issue a replacement Warrant in a form similar to this Warrant, in the name of such transferee (and in the case of such partial transfer, the Company shall issue a new Warrant to Holder to purchase the balance of the shares of Common Stock that is not the subject of transfer). Holder shall indemnify the Company against any loss, claim or damages arising from or related to such transfer and shall sign a written instrument of indemnity in a form acceptable to the Company. Page 5 This Warrant shall be deemed to be a contract made under the laws of the State of Texas and shall for all purposes be governed by and construed in accordance with the laws of such State. Dated: July 11, 1997. NATIONAL ENERGY GROUP, INC. By: /s/ Miles D. Bender ----------------------------- Miles D. Bender, President and Chief Executive Officer Page 6 WARRANT EXERCISE NOTICE INSTRUCTIONS IN ORDER FOR WARRANTS TO BE EXERCISED, THIS NOTICE MUST BE RECEIVED BY THE COMPANY ON OR PRIOR TO THE EXPIRATION DATE SPECIFIED IN THE WARRANT. This Warrant Exercise Notice, dated _______________ (the "Notice"), relates to this Warrant, dated July 11, 1997 (the "Warrant"), issued by National Energy Group, Inc., a Delaware corporation whose address is 4925 Greenville Ave., Ste. 1400, Dallas, Texas, 75206 (the "Company"), to the undersigned. This Warrant initially represented the right to purchase the aggregate number of shares as indicated in this Warrant, which number will be reduced by this Warrant Exercise Notice and by any prior or future Warrant Exercise Notices. The undersigned hereby exercises the portion of this Warrant to purchase, and hereby purchases, ________ shares of the Company's Common Stock, at the current exercise price of $_______ per share, which is the price, as adjusted, indicated in this Warrant. The undersigned acknowledges that the number of shares of Common Stock must be divisible by 100 for an effective exercise of any portion or all of this Warrant. The full amount of $__________ in United States funds, by certified check payable to the order of the Company is attached hereto. The undersigned acknowledges that a certificate for the shares of Common Stock purchased by the undersigned through the exercise of this Warrant pursuant to this Notice will be delivered to the undersigned, at the address indicated below (unless the Company has received written notice of a different address) as soon as practicable after receipt of this notice and the full payment of the applicable purchase price. "HOLDER" By: ---------------------------------- Title: ------------------------------- Address: ----------------------------- ------------------------------------- ------------------------------------- ------------------------------------- ------------------------------------- ------------------------------------- Social Security or Taxpayer Identification Number: Business Phone Number: Home Phone Number: -----END PRIVACY-ENHANCED MESSAGE-----