EXHIBIT 3.1
THIRD AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
THE MERIDIAN RESOURCE CORPORATION
ARTICLE ONE
The Meridian Resource Corporation, a Texas corporation (the
"Corporation"), pursuant to the provisions of Article 4.07 of the Texas Business
Corporation Act, as amended ("TBCA"), hereby adopts these Third Amended and
Restated Articles of Incorporation (the "Third Amended and Restated Articles"),
which accurately copy the entire text of the Second Amended and Restated
Articles of Incorporation of the Corporation, as amended and supplemented by all
certificates of amendment and correction previously issued by the Secretary of
State of the State of Texas (the "Second Amended and Restated Articles of
Incorporation"), and as further amended by these Third Amended and Restated
Articles as hereinafter set forth and which contain no other change in any
provision thereof.
ARTICLE TWO
The Second Amended and Restated Articles of Incorporation of the
Corporation are hereby amended by these Third Amended and Restated Articles of
Incorporation as follows:
Paragraph 1 of Article Four be and hereby is amended to read as follows:
"ARTICLE FOUR
The Corporation shall have authority to issue two (2) classes of stock,
and the total number authorized shall be Two Hundred Million (200,000,000)
shares of Common Stock, par value of One Cent ($0.01) per share ("Common
Stock"), and Twenty-five Million (25,000,000) shares of Preferred Stock, par
value of One Dollar ($1.00) per share ("Preferred Stock"). A description of the
different classes of stock of the Corporation and a statement of the
designations and the powers, preferences
and rights, and the qualifications, limitations or restrictions thereof, in
respect of each class of such stock are as follows:
1. ISSUANCE IN CLASS OR SERIES. The Common or Preferred Stock may be
issued from time to time in one (1) or more series, or either or both of the
Common or Preferred Stock may be divided into additional classes and such
classes into one (1) or more series which classes or series shall have such
designations, preferences, limitations, and relative rights, including voting
rights as shall be stated and expressed in the resolution or resolutions adopted
by the Board of Directors designating such class or series, which resolution or
resolutions the Board of Directors is hereby expressly authorized to adopt. Such
resolution or resolutions with respect to a class or series shall specify all or
such of the rights or preferences of such class or series as the Board of
Directors shall determine. Without limiting the generality of the foregoing
grant of authority, the Board of Directors is authorized to determine any or all
of the following, and the shares of each series may vary from the shares of any
other series, in any or all of the following aspects:
(a) The number of shares of such series (which may subsequently be
increased, except as otherwise provided by the resolutions of the Board of
Directors providing for the issue of such series, or decreased to a number
not less than the number of shares then outstanding) and the distinctive
designation thereof;
(b) The dividend rights, if any, of such series, the dividend
preferences, if any, as between such series and any other class or series
of stock, whether and the extent to which shares of such series shall be
entitled to participate in dividends with shares of any other series or
class of stock, whether and the extent to which dividends on such series
shall be cumulative, and any limitations, restrictions or conditions on
the payment of such dividends;
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(c) The time or times during which, the price or prices at which,
and any other terms or conditions on which the shares of such series may
be redeemed, if redeemable;
(d) The rights of such series, and the preferences, if any, as
between such series and any other class or series of stock, in the event
of any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation and whether and the extent to which shares of any such
series shall be entitled to participate in such event with any other class
or series of stock;
(e) The voting powers, if any, in addition to the voting powers
prescribed by law on shares of such series, and the terms of exercise of
such voting powers;
(f) Whether shares of such series shall be convertible into or
exchangeable for shares of any other series or class of stock, or any
other securities, and the terms and conditions, if any, applicable to such
right; or
(g) The terms and conditions, if any, of any purchase, retirement or
sinking fund which may be provided for the shares of such series.
All shares of the Common Stock shall rank equally and all shares of
the Preferred Stock shall rank equally, and be identical within their classes in
all respects regardless of series, except as to terms which may be specified by
the Board of Directors pursuant to the above provisions. All shares of any one
(l) series of a class of Common or Preferred Stock shall be of equal rank and
identical in all respects, except that shares of any one (1) series issued at
different times may differ as to the dates which dividends thereon shall accrue
and be cumulative."
ARTICLE THREE
The amendment made by these Third Amended and Restated Articles of
Incorporation has been effected in conformity with the provisions of the TBCA
and such Third Amended and
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Restated Articles of Incorporation and such amendment made by the Third Amended
and Restated Articles of Incorporation was duly adopted by the shareholders of
the Corporation on the 20th day of July, 1998.
ARTICLE FOUR
The number of shares outstanding was 33,721,315 and the number of
shares entitled to vote on the amendment made by these Third Amended and
Restated Articles of Incorporation was 23,904,009, the number of shares voted
for such Third Amended and Restated Articles of Incorporation was 23,765,459;
and the number of shares voted against such Third Amended and Restated Articles
was 1,095,592.
ARTICLE FIVE
The Articles of Incorporation as amended and supplemented by all
certificates of amendment and correction previously issued by the Secretary of
State of the State of Texas are hereby superseded by the following Third Amended
and Restated Articles which accurately copy the entire text thereof and as
amended as set forth above:
(TEXT RESUMES ON THE FOLLOWING PAGE)
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"THIRD AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
THE MERIDIAN RESOURCE CORPORATION
ARTICLE ONE
The name of the corporation is The Meridian Resource Corporation
(the "Corporation"). These Third Amended and Restated Articles of Incorporation
are herein referred to as the "Articles of Incorporation."
ARTICLE TWO
The address of the Corporation 's registered office in the State of
Texas is 15995 N. Barkers Landing, Suite 300, Houston, Texas 77079, and the name
of its registered agent at such address is Joseph A. Reeves, Jr.
ARTICLE THREE
The purpose for which the Corporation is organized is to conduct or
engage in any lawful act or activity for which corporations may be incorporated
under the Texas Business Corporation Act (the "TBCA").
ARTICLE FOUR
The Corporation shall have authority to issue two (2) classes of
stock, and the total number authorized shall be Two Hundred Million
(200,000,000) shares of Common Stock, par value of One Cent ($0.01) per share
("Common Stock"), and Twenty-five Million (25,000,000) shares of Preferred
Stock, par value of One Dollar ($1.00) per share ("Preferred Stock"). A
description of the different classes of stock of the Corporation and a statement
of the designations and the powers,
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preferences and rights, and the qualifications, limitations or restrictions
thereof, in respect of each class of such stock are as follows:
1. ISSUANCE IN CLASS OR SERIES. The Common or Preferred Stock may be
issued from time to time in one (1) or more series, or either or both of the
Common or Preferred Stock may be divided into additional classes and such
classes into one (1) or more series which classes or series shall have such
designations, preferences, limitations, and relative rights, including voting
rights as shall be stated and expressed in the resolution or resolutions adopted
by the Board of Directors designating such class or series, which resolution or
resolutions the Board of Directors is hereby expressly authorized to adopt. Such
resolution or resolutions with respect to a class or series shall specify all or
such of the rights or preferences of such class or series as the Board of
Directors shall determine. Without limiting the generality of the foregoing
grant of authority, the Board of Directors is authorized to determine any or all
of the following, and the shares of each series may vary from the shares of any
other series, in any or all of the following aspects:
(a) The number of shares of such series (which may subsequently be
increased, except as otherwise provided by the resolutions of the Board of
Directors providing for the issue of such series, or decreased to a number
not less than the number of shares then outstanding) and the distinctive
designation thereof;
(b) The dividend rights, if any, of such series, the dividend
preferences, if any, as between such series and any other class or series
of stock, whether and the extent to which shares of such series shall be
entitled to participate in dividends with shares of any other series or
class of stock, whether and the extent to which dividends on such series
shall be cumulative, and any limitations, restrictions or conditions on
the payment of such dividends;
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(c) The time or times during which, the price or prices at which,
and any other terms or conditions on which the shares of such series may
be redeemed, if redeemable;
(d) The rights of such series, and the preferences, if any, as
between such series and any other class or series of stock, in the event
of any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation and whether and the extent to which shares of any such
series shall be entitled to participate in such event with any other class
or series of stock;
(e) The voting powers, if any, in addition to the voting powers
prescribed by law on shares of such series, and the terms of exercise of
such voting powers;
(f) Whether shares of such series shall be convertible into or
exchangeable for shares of any other series or class of stock, or any
other securities, and the terms and conditions, if any, applicable to such
right; or
(g) The terms and conditions, if any, of any purchase, retirement or
sinking fund which may be provided for the shares of such series.
All shares of the Common Stock shall rank equally and all shares of
the Preferred Stock shall rank equally, and be identical within their classes in
all respects regardless of series, except as to terms which may be specified by
the Board of Directors pursuant to the above provisions. All shares of any one
(l) series of a class of Common or Preferred Stock shall be of equal rank and
identical in all respects, except that shares of any one (1) series issued at
different times may differ as to the dates which dividends thereon shall accrue
and be cumulative.
2. OTHER PROVISIONS. Shares of Common or Preferred Stock of any class or
series may be issued with such voting powers, full or limited, or no voting
powers, and such designations, preferences and relative participating, option or
special rights, and qualifications, limitations or
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restrictions thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issuance of such stock adopted by the Board of
Directors. Any of the designations, preferences, limitations, or relative
rights, including the voting rights of any series of shares, may be made
dependent upon facts ascertainable outside the resolution or resolutions of the
Board of Directors providing for the issue of such stock by the Board of
Directors, provided the manner in which such facts shall operate upon the voting
powers, designations, preferences, rights and qualifications, limitations or
restrictions of such class or series is clearly set forth in the resolution or
resolutions providing for the issue of such stock adopted by the Board of
Directors.
3. COMMON STOCK. Except as otherwise provided in any resolution or
resolutions adopted by the Board of Directors providing for the issuance of a
class or series of Preferred Stock, the Common Stock shall (a) have the
exclusive voting power of the Corporation; (b) entitle the holders thereof to
one (1) vote per share at all meetings of the shareholders of the Corporation;
(c) entitle the holders to share ratably, without preference over any other
shares of the Corporation in all assets of the Corporation in the event of any
dissolution, liquidation or winding up of the Corporation; and (d) entitle the
record holders thereof on such record dates as are determined, from time to
time, by the Board of Directors to receive such dividends, if any, if, as and
when declared by the Board of Directors.
4. PREEMPTIVE RIGHTS DENIED. No shareholder shall have any preemptive
right to acquire any additional unissued or treasury shares of the Corporation
of any class now or hereafter authorized or held.
5. CUMULATIVE VOTING DENIED. Shareholders of the Corporation shall not
have the right to cumulate their votes at any election of directors. At each
such election of directors, each shareholder
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shall be entitled to vote in person or by proxy the number of shares owned by
him in the election of each director for whose election he has a right to vote.
ARTICLE FIVE
The period of duration of the Corporation is perpetual.
ARTICLE SIX
1. NUMBER, ELECTION AND TERMS OF DIRECTORS. The business and affairs of
the Corporation shall be managed by a Board of Directors, which, subject to the
rights of holders of shares of any class of series of Preferred Stock then
outstanding to elect additional directors under specified circumstances, shall
consist of the number of the members of the initial Board of Directors as set
forth herein or such other number, not less than three (3), as may be specified
from time to time by action of the Board of Directors pursuant to the Bylaws.
The directors shall be classified into three (3) classes: Class I, Class II and
Class III. Such classes shall be as nearly equal in number of directors as
possible. Each director shall serve for a term ending on the expiration of the
term for directors of the class to which such director belongs; provided,
however, that any director elected to fill a vacancy or to a newly-created
directorship shall serve until the next annual meeting of shareholders, at which
time the shareholders shall confirm the election of such director for the
balance of the term in office of directors of that class or elect another to
such directorship. The directors originally elected to Class I shall serve for a
term expiring at the annual meeting of shareholders to be held in 1991 and the
term in office of directors of such class shall expire at the annual meeting of
shareholders in every third year thereafter. The directors originally elected to
Class II shall serve for a term expiring at the annual meeting of shareholders
to be held in 1992 and the term in office of directors of such class shall
expire at the annual meeting of shareholders in every third year thereafter. The
directors originally elected to Class III shall serve for a term expiring at the
annual meeting of shareholders to
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be held in 1993 and the term in office of directors of such class shall expire
at the annual meeting of shareholders in every third year thereafter. The
foregoing notwithstanding, each director shall serve until his successor shall
have been duly elected and qualified, unless he shall resign, become
disqualified or disabled, or shall otherwise be removed.
At each annual election, the directors chosen to succeed those whose
terms then expire shall be of the same class as the directors they succeed,
unless, by reason of any intervening changes in the authorized number of
directors, the Board of Directors shall designate one (1) or more directorships
whose term then expires as directorships of another class in order more nearly
to achieve equality of number of directors among the classes.
Notwithstanding the rule that the three (3) classes shall be as nearly
equal in number of directors as possible, in the event of any change in the
authorized number of directors, each director then continuing to serve as such
shall nevertheless continue as a director of the class of which he is a member
until the expiration of his current term, or his prior death, resignation or
removal. If any newly-created directorship may, consistent with the rule that
the three (3) classes shall be as nearly equal in number of directors as
possible, be allocated to one (1) or two (2) or more classes, the Board of
Directors shall allocate it to that of the available classes whose terms of
office are due to expire at the earliest date following such allocation. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
2. NEWLY-CREATED DIRECTORSHIPS AND VACANCIES. Subject to the rights of
the holders of any series of any Preferred Stock then outstanding, newly-created
directorships resulting from any increase in the authorized number of directors
and any vacancies in the Board of Directors resulting from the death,
resignation, retirement, disqualification, removal from office or other cause
may be
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filled by a majority vote of the directors then in office even though less than
a quorum, or by a sole remaining director.
3. REMOVAL. Subject to the rights of the holders of any series of any
Preferred Stock then outstanding, any director or the entire Board of Directors,
may be removed from office at any annual or special meeting called for such
purpose, and then only for cause and only by the affirmative vote of the holders
of eighty percent (80%) or more of the voting power of all of the shares of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class. As used herein, cause shall mean only the following:
proof, beyond the existence of a reasonable doubt that a director has (a) been
convicted of a felony, (b) committed grossly negligent or willful misconduct
resulting in a material detriment to the Corporation, or (c) committed a
material breach of his fiduciary duty to the Corporation resulting in a material
detriment to the Corporation.
4. AMENDMENT, REPEAL, ETC. Notwithstanding anything contained in these
Articles of Incorporation to the contrary, the affirmative vote of the holders
of eighty percent (80%) or more of the voting power of all of the shares of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to alter, amend or adopt any
provision inconsistent with or repeal this Article Six, or to alter, amend or
adopt any provision inconsistent with or repeal comparable sections of the
Bylaws of the Corporation.
ARTICLE SEVEN
Subject to the rights of the holders of any series of Preferred Shares
then outstanding, any action required or permitted to be taken by the
shareholders of the Corporation must be effected at a duly called annual or
special meeting of shareholders of the Corporation and may not be effected by
any consent in writing by such shareholders unless all of the shareholders
entitled to vote thereon consent thereto in writing. Notwithstanding anything
contained in these Articles of Incorporation to
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the contrary, the affirmative vote of the holders of fifty percent (50%) or more
of the voting power of all the shares of the Corporation entitled to vote
generally in the election of directors, voting together as a single class, shall
be required to call a special meeting of shareholders, or to alter, amend, or
adopt any provision inconsistent with or repeal this Article Seven, or to alter,
amend, or adopt any provision inconsistent with comparable sections of the
Bylaws.
ARTICLE EIGHT
1. VOTE REQUIRED FOR CERTAIN BUSINESS COMBINATIONS. In addition to any
affirmative vote required by law or these Articles of Incorporation or the
Bylaws of the Corporation, and except as otherwise expressly provided in Section
2 of this Article Eight, a Business Combination (as hereinafter defined) with,
or proposed by or on behalf of, any Related Person (as hereinafter defined) or
any Affiliate or Associate (as hereinafter defined) of any Related Person or any
person who thereafter would be an Affiliate or Associate of such Related Person,
shall require the affirmative vote of not less than eighty percent (80%) of the
votes entitled to be cast by the holders of all of the then outstanding shares
of Voting Stock (as hereinafter defined), voting together as a single class, and
the affirmative vote of not less than a majority of the votes entitled to be
cast by the Voting Stock beneficially owned by persons other than such Related
Person. Each share of Voting Stock shall have the number of votes granted to it
in, or duly fixed by the Board of Directors pursuant to, Article Four of these
Articles of Incorporation. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage or separate class vote may be specified, by law, or in any agreement
with any national securities exchange or otherwise.
2. EXCEPTIONS TO HIGHER VOTE REQUIREMENT. The provisions of Section 1 of
this Article Eight shall not be applicable to any particular Business
Combination, and such Business Combination shall require only such affirmative
vote, if any, as is required by law or by any other provision of these
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Articles of Incorporation or the Bylaws of the Corporation, or any agreement
with any national securities exchange, if all of the conditions specified in
either of the following Paragraphs (a) or (b) are met or, in the case of a
Business Combination not involving the payment of consideration to the holders
of the Corporation's outstanding Capital Stock (as hereinafter defined), if the
condition specified in the following Paragraph (a) is met:
(a) The Business Combination shall have been approved either specifically
or as a transaction which is within an approved category of transactions, by a
majority (whether such approval is made prior to or subsequent to the
acquisition of or announcement or public disclosure of the intention to acquire,
beneficial ownership of the Voting Stock that caused the Related Person to
become a Related Person) of the Continuing Directors (as hereinafter defined).
(b) All of the following conditions shall have been met:
(i) The aggregate amount of cash and the Fair Market Value (as
hereinafter defined), as of the date of the consummation of the Business
Combination, of consideration other than cash to be received per share by
holders of Common Stock of the Corporation in such Business Combination shall be
at least equal to the higher amount determined under clauses (A) and (B) below:
(A) (If applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by or
on behalf of the Related Person for any share of Common Stock of the Corporation
in connection with the acquisition by the Related Person of beneficial ownership
of shares of Common Stock,
(x) within the two-year period immediately prior to the
first public announcement of the proposed Business Combination (the
"Announcement Date"), or
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(y) in the transaction in which it became a Related
Person, whichever is higher, in either case as adjusted for any subsequent stock
split, stock dividend, subdivision or reclassification with respect to the
Common Stock of the Corporation; and
(B) The Fair Market Value per share of the Common Stock of the
Corporation on the Announcement Date or on the date (the "Determination Date")
on which the Related Person became a Related Person, whichever is higher, as
adjusted for any subsequent stock split, stock dividend, subdivision or
reclassification with respect to the Common Stock of the Corporation.
(ii) The aggregate amount of cash and the Fair Market Value, as of
the date of the consummation of the Business Combination, of consideration
other than cash to be received per share by holders of shares of any class
or series of outstanding Capital Stock, other than Common Stock of the
Corporation, shall be at least equal to the highest amount determined
under clauses (A), (B) and (C) below:
(A) (If applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid
by or on behalf of the Related Person for any share of such class or
series of Capital Stock in connection with the acquisition by the Related
Person of beneficial ownership of shares of such class or series of
Capital Stock,
(x) within the two-year period immediately prior to
the Announcement Date, or
(y) in the transaction in which it became a Related
Person, whichever is higher, in either case as adjusted for any subsequent stock
split, stock dividend, subdivision or reclassification with respect to such
class or series of Capital Stock;
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(B) The Fair Market Value per share of such class or series of
Capital Stock on the Announcement Date or on the Determination Date, whichever
is higher, as adjusted for any subsequent stock split, stock dividend,
subdivision or reclassification with respect to such class or series of Capital
Stock; and
(C) (If applicable) the highest preferential amount per share
to which the holders of shares of such class or series of Capital Stock would be
entitled, as adjusted for any subsequent stock split, stock dividend,
subdivision or reclassification with respect to such class or series of Capital
Stock, in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation regardless of whether the Business
Combination to be consummated constitutes such an event.
The provisions of this Paragraph (b) shall be required to be met with
respect to every class or series of outstanding Capital Stock, whether or not
the Related Person has previously acquired beneficial ownership of any shares of
a particular class or series of Capital Stock.
(iii) The consideration to be received by holders of a particular
class or series of outstanding Capital Stock shall be in cash or in the same
form as previously has been paid by or on behalf of the Related Person in
connection with its direct or indirect acquisition of beneficial ownership of
shares of such class or series of Capital Stock. If the consideration so paid
for shares of any class or series of Capital Stock varies as to form, the form
of consideration for such class or series of Capital Stock shall be either cash
or the form used to acquire beneficial ownership of the largest number of shares
of such class or series of Capital Stock previously acquired by the Related
Person.
(iv) After the Determination Date and prior to the consummation of
such Business Combination:
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(A) Except as approved by a majority of the Continuing
Directors, there shall have been no failure to declare and pay at the regular
date therefor any full quarterly dividends (whether or not cumulative) payable
in accordance with the terms of any outstanding Capital Stock;
(B) There shall have been no reduction in the annual rate of
dividends paid on the Common Stock of the Corporation (except as necessary
to reflect any stock split, stock dividend or subdivision of the Common
Stock of the Corporation), except as approved by a majority of the
Continuing Directors;
(C) There shall have been an increase in the annual rate of
dividends paid on the Common Stock of the (corporation as necessary to
reflect any reclassification (including any reverse stock split,
recapitalization, reorganization or any similar transaction that has the
effect of reducing the number of outstanding shares of Common Stock of the
Corporation, unless the failure to increase such annual rate is approved
by a majority of the Continuing Directors; and
(D) Such Related Person shall not have become the beneficial
owner of any additional shares of Capital Stock except as part of the
transaction that results in such Related Person becoming a Related Person
and except in a transaction that, after giving effect thereto, would not
result in any increase in the Related Person 's percentage beneficial
ownership of any class or series of Capital Stock.
(v) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder (the
"Act") (or any subsequent provisions replacing such Act, rules or regulations)
shall be mailed to all shareholders of the Corporation at least thirty (30) days
prior to the consummation of such Business Combination (whether or not such
proxy
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or information statement is required to be mailed pursuant to such Act or
subsequent provisions). The proxy or information statement shall contain on the
first page thereof, in a prominent place, any statement as to the advisability
(or inadvisability) of the Business Combination that the Continuing Directors,
or any of them, may choose to make and, if deemed advisable by a majority of the
Continuing Directors, the opinion of an investment banking firm selected by a
majority of the Continuing Directors as to the fairness (or lack of fairness) of
the terms of the Business Combination from the financial point of view of the
holders of the outstanding shares of Capital Stock other than the Related Person
and its Affiliates or Associates, such investment banking firm to be furnished
with all information it reasonably requests and to be paid a reasonable fee for
its services' by the Corporation.
(vi) Such Related Person shall not have made any major change in the
Corporation's business or equity capital structure without the approval of a
majority of the Continuing Directors.
(vii) After the Determination Date, the Related Person shall not
have received the benefit, directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantages provided by the
Corporation, whether in anticipation of or in connection with such Business
Combination or otherwise.
3. CERTAIN DEFINITIONS. The following definitions shall apply with respect
to this Article Eight: (a) The term "Business Combination" shall mean:
(i) Any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with (A) any Related Person or (B) any other company
(whether or not itself a Related Person) which is, or after such merger or
consolidation would be, an Affiliate or Associate of a Related Person; or
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(ii) Any sale, lease, exchange, mortgage, pledge, transfer or other
disposition or security arrangement, investment, loan, advance, guarantee,
agreement to purchase, agreement to pay, extension of credit, joint venture
participation or other arrangement (in one transaction or a series of
transactions) to, with or for the benefit of any Related Person or any Affiliate
or Associate of any Related Person involving any assets, securities or
commitments of the Corporation, any Subsidiary or any Related Person or any
Affiliate or Associate of any Related Person which (except for any arrangement,
whether as an employee, consultant or otherwise, other than as a director,
pursuant to which any Related Person or any Affiliate or Associate thereof
shall, directly or indirectly, have any control over or responsibility for the
management of any aspect of the business or affairs of the Corporation, with
respect to which arrangements the value tests set forth below shall not apply),
together with all other such arrangements (including all contemplated future
events), has an aggregate Fair Market Value and/or involves aggregate
commitments of $2,500,000 or more or constitutes more than five percent (5%) of
the book value of the total assets (in the case of transactions involving assets
or commitments other than capital stock) or five percent (5%) of the
shareholders' equity (in the case of transactions in capital stock) of the
equity in question (the "Substantial Part"), as reflected in the most recent
fiscal year-end consolidated balance sheet of such entity existing at the time
the shareholders of the Corporation would be required to approve or authorize
the Business Combination involving the assets, securities and/or commitments
constituting any Substantial Part; or
(iii) The adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of any Related Person or
any Affiliate or Associate of any Related Person; or
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(iv) Any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries or any other transaction
(whether or not with, into or otherwise involving a Related Person) that has the
effect, directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class of Equity Security (as hereinafter defined) of
the Corporation or any Subsidiary, that is beneficially owned by any Related
Person or any Affiliate or Associate of any Related Person; or
(v) Any agreement, contract or other arrangement providing for any
one or more of the actions specified in the foregoing clauses (i) to (iv).
(b) The term "Capital Stock" shall mean all capital stock of the
Corporation authorized to be issued from time to time under Article Four of
these Articles of Incorporation, and the term "Voting Stock" shall mean all
Capital Stock which by its terms may be voted on all matters submitted to the
shareholders of the Corporation generally.
(c) The term "person" shall mean any individual, firm, company or other
entity and shall include any group comprised of any person and any other person
with whom such person or any Affiliate or Associate of such person has any
agreement, arrangement or understanding, directly or indirectly, for the purpose
of acquiring, holding, voting or disposing of Capital Stock.
(d) The term "Related Person" shall mean any person (other than the
Corporation or any Subsidiary and other than any profit-sharing, employee stock
ownership or other employee benefit plan of the Corporation or any Subsidiary or
any trustee of or fiduciary with respect to any such plan when acting in such
capacity and other than any person who on September 30, 1990 was the holder of
five percent (5%) or more of the outstanding shares of the Common Stock of the
Corporation) who or which (i) is or has announced or publicly disclosed a plan
or intention to become the beneficial
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owner of Voting Stock representing ten percent (10%) or more of the votes
entitled to be cast by the holders of all the then outstanding shares of Voting
Stock; or (ii) is an Affiliate or Associate of the Corporation and at any time
within the two-year period immediately prior to the date in question was the
beneficial owner of Voting Stock representing ten percent (10%) of more of the
votes entitled to be cast by the holders of all the then outstanding shares of
Voting Stock; or (iii) is an assignee of or has otherwise succeeded to any
shares of Voting Stock that were at any time within the two-year period
immediately prior to the date in question beneficially owned by any Related
Person, if such assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering within the
meaning of the Securities Act of 1933, as amended.
(e) A person shall be a "beneficial owner" of any Capital Stock (i) which
such person or any of its Affiliates or Associates beneficially owns, directly
or indirectly; (ii) which such person or any of its Affiliates or Associates
has, directly or indirectly, (A) the right to Acquire (whether such right is
exercisable immediately or only after the passage of time and notwithstanding
that Rule 13d-3 under the Act deems such shares to be beneficially owned only if
such right may be exercised within sixty (60) days), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights, exchange
rights, warrants or options, or otherwise, or (B) the right to vote pursuant to
any agreement, arrangement or understanding; or (iii) which are beneficially
owned, directly or indirectly, by any other person with which such person or any
of its Affiliates or Associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any shares of
Capital Stock. For the purposes of determining whether a person is a Related
Person pursuant to Paragraph (d) of this Section 3, the number of shares of
Capital Stock deemed to be outstanding shall include shares deemed beneficially
owned by such person through application of this Paragraph (e) of Section 3, but
shall not include any other shares of Capital Stock
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that may be issuable pursuant to any arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.
(f) The term "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 under the Act as in effect on
September 30, 1990 (the term "registrant" in said Rule 12b-2 meaning, in this
case, the Corporation).
(g) The term "Subsidiary" means any company of which a majority of any
class of Equity Security is beneficially owned by the Corporation; provided,
however, that for the purposes of the definition of Related Person set forth in
Paragraph (d) of this Section 3, the term "Subsidiary" shall mean only a company
of which a majority of each class of Equity Security is beneficially owned by
the Corporation.
(h) The term "Continuing Director" means any member of the Board of
Directors of the Corporation, while such person is a member of the Board of
Directors, who is not an Affiliate or Associate or representative of the Related
Person and was a member of the Board of Directors prior to the Determination
Date, and any successor of a Continuing Director, while such successor is a
member of the Board of Directors, who is not an Affiliate or Associate or
representative of the Related Person and is recommended or elected to succeed
the Continuing Director by a majority of Continuing Directors.
(i) The term "Fair Market Value" means (i) in the case of stock, the
highest closing sales price during the 30-day period immediately preceding the
date in question of a share of such stock registered under the Act on the
principal United States securities exchange on which such stock is listed, or,
if such stock is not listed on any such exchange, the highest closing bid
quotation with respect to a share of such stock during the 30-day period
preceding the date in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any similar system
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then in use, or if no such quotations are available, the fair market value on
the date in question of a share of such stock as determined by a majority of the
Continuing Directors in good faith and (ii) in the case of property other than
stock, the fair market value of such property on the date in question as
determined by a majority of the Continuing Directors in good faith.
(j) In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash to be received" as used in
Paragraphs (b)(i) and (b)(ii) of Section 2 of this Article Eight shall include
the shares of Common Stock of the Corporation and/or the shares of any other
class or series of Capital Stock retained by the holders of such shares.
(k) The term "Equity Security" shall have the meaning ascribed to such
term in Section 3(a)(11) of the Act, as in effect on September 30, 1990.
4. POWERS OF CONTINUING DIRECTORS. A majority of the Continuing Directors
shall have the power and duty to determine for the purposes of this Article
Eight, on the basis of information known to them after reasonable inquiry, any
and all questions, interpretations and determinations arising under, or with
regard to the application of, this Article Eight, including, without limitation,
(a) whether a person is a Related Person, (b) the number of shares of Capital
Stock or other securities beneficially owned by any person, (c) whether a person
is an Affiliate or Associate of another, (d) whether a Business Combination is
with, or proposed by, or on behalf of a Related Person or an Affiliate or
Associate of a Related Person, (e) whether the assets that are the subject of
any Business Combination have, or the consideration to be received for the
issuance or transfer of securities by the Corporation or any Subsidiary in any
Business Combination has, an aggregate Fair Market Value of $2,500,000 or more,
and (f) whether the assets or securities that are the subject of any Business
Combination constitute a Substantial Part. Any such determination made in good
faith shall be binding and conclusive on all parties.
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5. NO EFFECT ON FIDUCIARY OBLIGATIONS OF RELATED PERSONS. Nothing
contained in this Article Eight shall be construed to relieve any Related Person
from any fiduciary obligation imposed by law.
6. COMPLIANCE WITH THIS ARTICLE EIGHT. The fact that any Business
Combination complies with the provisions of Section 2 of this Article Eight
shall not be construed to impose any fiduciary duty, obligation or
responsibility on the Board of Directors, or any member thereof, to approve such
Business Combination or recommend its adoption or approval to the shareholders
of the Corporation, nor shall such compliance limit, prohibit or otherwise
restrict in any manner the Board of Directors, or any member thereof, with
respect to evaluations of or actions and responses taken with respect to such
Business Combination.
7. BUSINESS COMBINATIONS PROPOSED BY RELATED PERSON. For the purpose of
this Article Eight, a Business Combination is presumed to have been proposed by,
or on behalf of, a Related Person or an Affiliate or Associate of a Related
Person or a person who thereafter would become such if (a) after the Related
Person became such, the Business Combination is proposed following the election
of any director of the Corporation who with respect to such Related Person,
would not qualify to serve as a Continuing Director or (b) such Related Person,
Affiliate, Associate or person votes for or consents to the adoption of any such
Business Combination, unless as to such Related Person, Affiliate, Associate or
person a majority of the Continuing Directors makes a good faith determination
that such Business Combination is not proposed by or on behalf of such Related
Person, Affiliate, Associate or person, based on information known to them after
reasonable inquiry.
8. PROVISION, REPEAL, ETC. Notwithstanding anything contained in these
Articles of Incorporation to the contrary, the affirmative vote of the holders
of at least eighty percent (80%) of the voting power of all outstanding shares
of Voting Stock voting together as a single class, and the
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affirmative vote of the holders of at least a majority of the voting power of
all outstanding shares of Voting Stock, voting together as a single class,
excluding the Voting Stock beneficially owned by a Related Person, shall be
required to alter, amend or repeal, or adopt any provision inconsistent with,
this Article Eight.
ARTICLE NINE
The Corporation shall indemnify its current or former directors, officers,
employees and agents or any person who served or is serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise from and
against any and all expenses, liabilities or other matters to the fullest extent
permitted by the TBCA. Such indemnification shall not be deemed exclusive of any
other rights to which such person may be entitled, under any bylaws, agreements,
vote of shareholders or disinterested directors, or otherwise, both as to
actions taken in their official capacity and as to action in another capacity
while holding such office, and shall inure to the benefit of the heirs,
executors and administrators of such persons. The Corporation shall have the
power to enter into agreements providing for indemnification by the Corporation
of current or former officers, directors, general partners, employees and agents
or any other person of or who served any predecessor corporation, partnership,
joint venture, trust or other enterprise from and against any and all expenses,
liabilities or other matters.
ARTICLE TEN
A director of the Corporation shall not be liable to the Corporation or
its shareholders for monetary damages for an act or omission in the director's
capacity as a director, except that this Article does not authorize the
elimination or limitation of the liability of a director to the extent the
director is found liable for: (a) a breach of the director's duty of loyalty to
the Corporation or its
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shareholders or members, (b) an act or omission not in good faith that
constitutes a breach of duty of the director to the Corporation, or an act or
omission that involves intentional misconduct or a knowing violation of the law,
(c) a transaction from which the director received an improper benefit, whether
or not the benefit resulted from an action taken within the scope of the
director's office, or (d) an act or omission for which the liability of a
director is expressly provided by an applicable statute.
ARTICLE ELEVEN
The classes, names and addresses of the persons who are the current
directors of the Corporation are as follows:
CLASS NAME ADDRESS
Class I Jack Prizzi 15995 N. Barkers Landing,
James T. Bond Suite 300, Houston, Texas
77079
Class II Gary Messersmith 15995 N. Barkers Landing,
E.L. Henry Suite 300, Houston, Texas
Joe E. Kares 77079
Class III Michael J. Mayell 15995 N. Barkers Landing,
Joseph A. Reeves, Jr. Suite 300, Houston, Texas
77079
15995 N. Barkers Landing,
Suite 300, Houston, Texas
Preferred Director Jim Funk 77079
ARTICLE TWELVE
The Corporation will not commence business until it has received for the
issuance of its shares consideration of a value of at least One Thousand Dollars
($1,000.00), consisting of money, labor done or property actually received."
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Dated this 28th day of August, 1998.
THE MERIDIAN RESOURCE CORPORATION
By: /s/ JOSEPH A. REEVES, JR.,
Joseph A. Reeves, Jr.,
Chairman of the Board
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