EXHIBIT 4.2
STATEMENT OF RESOLUTION ESTABLISHING SERIES OF SHARES
THE MERIDIAN RESOURCE CORPORATION
STATEMENT OF RESOLUTION ESTABLISHING
SERIES OF SHARES
TO THE SECRETARY OF STATE
OF THE STATE OF TEXAS:
Pursuant to the provisions of Article 2.13 of the Texas Business
Corporation Act, the undersigned corporation submits the following statement for
the purpose of establishing and designating a series of shares and fixing and
determining the relative rights and preferences thereof:
1. The name of the Corporation is The Meridian Resource Corporation.
2. The following resolution, establishing and designating a series of
shares and fixing and determining the relative rights and preferences thereof,
was duly adopted by the Board of Directors of the Corporation on May 5, 1999:
RESOLVED, that pursuant to Third Amended and Restated Articles of
Incorporation of the Corporation authorizing the Board of Directors to establish
and designate series of preferred stock, $1.00 par value, of the Corporation
(the "Preferred Stock") and to fix and determine the relative rights and
preferences of the shares of any such series , there is hereby designated a
series of Preferred Stock to be called "Series B Preferred Stock" to consist of
50,000 shares and to have the following terms:
Section 1. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the rights of holders of shares of any series of
Preferred Stock that ranks prior to the Series B Preferred Stock with respect to
dividends, the holders of shares of Series B Preferred Stock, in preference to
the rights of holders of shares of Common Stock, par value $0.01 per share
("Common Stock"), of the Corporation with respect to dividends, and in
preference to the rights of holders of shares of any series of Preferred Stock
that ranks junior to the Series B Preferred Stock with respect to dividends,
shall be entitled to receive, when, as and if declared by the Board out of funds
legally available for that purpose, quarterly dividends, which shall be payable
in cash except as hereinafter provided, on the first day of January, April, July
and October in each year during which a share or fraction of a share of Series B
Preferred Stock is outstanding (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series B Preferred Stock, each such dividend to be in an amount per share
(rounded to the nearest cent) equal to:
(i) subject to the provision for adjustment set forth in the next
succeeding sentence,
(A) 1,000 times the aggregate per share amount of all cash
dividends declared on the Common Stock after the immediately
preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, after the first issuance of
any share or fraction of a share of Series B Preferred Stock, plus
(B) 1,000 times the aggregate per share amount, which shall be
payable in kind, of all non-cash dividends or other distributions
(other than (x) a dividend on the Common Stock that is payable in
shares of Common Stock or (y) a distribution solely on account of a
reclassification of, or other split-up, division or combination of
shares of, Common Stock) declared on the Common Stock after the
immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, after the
first issuance of any share or fraction of a share of Series B
Preferred Stock; or
(ii) if no dividend or other distribution (other than (x) a dividend
on the Common Stock that is payable in shares of Common Stock or (y) a
distribution solely on account of a reclassification of, or other
split-up, division or combination of shares of, Common Stock) shall have
been declared on the Common Stock after the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, after the first issuance of any share or fraction
of a share of Series B Preferred Stock, $.01.
In the event that the Corporation shall at any time after May 5, 1999, (1)
declare a dividend on the Common Stock that is payable in shares of Common
Stock, (2) reclassify the Common Stock or (3) otherwise effect a split-up,
division or combination of shares of Common Stock, then in each such case the
amount per share to which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event under Section 2(a)(i) shall be adjusted
by multiplying such amount by a fraction, the numerator of which shall be the
number of shares of Common Stock that are outstanding immediately after such
event and the denominator of which shall be the number of shares of Common Stock
that were outstanding immediately prior to such event.
(b) Immediately after the Board declares a dividend or other distribution
on the Common Stock (other than (x) a dividend on the Common Stock that is
payable in shares of Common Stock or (y) a distribution solely on account of a
reclassification of, or other split-up, division or combination of shares of,
Common Stock), if any share or fraction of a share of Series B Preferred Stock
is then outstanding, the Board shall declare a dividend on the Series B
Preferred Stock, which shall be payable at the time and in the amount provided
in Section 2(a). If (i) any share or fraction of a share of Series B Preferred
stock is then outstanding, (ii) no dividend or other distribution (other than
(x) a dividend on the Common Stock that is payable in shares of Common Stock or
(y) a distribution solely on account of a reclassification of, or other
split-up, division or combination of shares of, Common Stock) shall have been
declared on the Common Stock during the period between the immediately preceding
Quarterly Dividend Payment Date and the next succeeding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment Date,
between the
date of the first issuance of any share or fraction of a share of Series B
Preferred Stock and such first Quarterly Dividend Payment Date, and (iii) there
are funds legally available for the payment of a dividend on the Series B
Preferred Stock, the Board shall, at any time prior to such next succeeding
Quarterly Dividend Payment Date or such first Quarterly Dividend Payment Date,
as the case may be, declare a dividend of $1.00 per share on the Series B
Preferred Stock, which shall be payable on such next succeeding Quarterly
Dividend Payment Date or such first Quarterly Dividend Payment Date, as the case
may be.
(c) Dividends on shares of Series B Preferred Stock shall begin to accrue
and be cumulative from the Quarterly Dividend Payment Date that immediately
precedes the date of issuance of such shares unless (i) the date of issuance of
such shares is prior to the record date for the determination of holders of
shares of Series B Preferred Stock entitled to receive a dividend on the first
Quarterly Dividend Payment Date, in which event dividends on such shares shall
begin to accrue and be cumulative from the date of issuance of such shares, (ii)
the date of issuance of such shares is a Quarterly Dividend Payment Date, in
which event dividends on such shares shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date, or (iii) the date of issuance of such
shares is a date after the record date for the determination of holders of
shares of Series B Preferred Stock entitled to receive a dividend on the
Quarterly Dividend Payment Date that next succeeds the date of issuance of such
shares, in which event dividends on such shares shall begin to accrue and be
cumulative from such next succeeding Quarterly Dividend Payment Date. Accrued
but unpaid dividends on shares of Series B Preferred Stock shall not bear
interest. If a dividend is declared on the Series B Preferred Stock and the
total amount of that dividend is less than the total amount of all dividends
accrued and payable on all shares of Series B Preferred Stock at the time of
payment of that dividend, then the portion of the total amount of that dividend
to be allocated to each of such shares shall be determined by multiplying the
total amount of that dividend by a fraction, the numerator of which shall be the
total amount of all dividends accrued and payable on that share at that time and
the denominator of which shall be the total amount of all dividends accrued and
payable on all such shares at that time. The Board may fix a record date for the
determination of holders of shares of Series B Preferred Stock entitled to
receive a dividend or other distribution on the Series B Preferred Stock, which
record date shall be no more than 30 days prior to the date fixed for the
payment of that dividend or other distribution.
(d) If at any time (i) any holder of shares of Series B Preferred Stock
would have been entitled under the foregoing provisions of this Section 2 to
have received by that time a dividend on such shares, assuming that such
dividend had been declared, out of funds legally available for that purpose, at
the time and in the amount provided in the foregoing provisions of this Section
2, and (ii) such dividend or any part thereof has not been paid to such holder,
then such dividend or part thereof shall be considered accrued and payable at
that time.
Section 2. VOTING.
(a) Subject to the provision for adjustment set forth in the next
succeeding sentence, each share of Series B Preferred Stock shall, except as
otherwise provided by law, entitle the holder thereof to 1,000 votes on each
matter that is submitted to a vote of stockholders of the Corporation. In the
event that the Corporation shall at any time after May 5, 1999, (i) declare a
dividend on the
Common Stock that is payable in shares of Common Stock, (ii) reclassify the
Common Stock or (iii) otherwise effect a split-up, division or combination of
shares of Common Stock, then in each such case the number of votes per share to
which holders of shares of Series B Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a fraction,
the numerator of which shall be the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which shall be
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(b) Except as otherwise provided by law or in the Third Amended and
Restated Articles of Incorporation of the Corporation or the resolution or
resolutions of the Board providing for the issuance of shares of Preferred Stock
(including but not limited to these resolutions):
(i) the holders of shares of Series B Preferred Stock, the holders
of shares of Common Stock and the holders of shares of any other class or
series of capital stock of the Corporation having general voting rights
shall vote together as a single class on each matter that is submitted to
a vote of stockholders of the Corporation, and
(ii) the holders of shares of Series B Preferred Stock shall not
have any special voting rights.
Section 3. CERTAIN RESTRICTIONS. Unless and until all dividends at the
time accrued and payable on all shares of Series B Preferred Stock have been
paid in full, the Corporation shall not:
(a) declare or pay any dividend, or make any other distribution, on
any class or series of capital stock of the Corporation that ranks junior,
either with respect to dividends or upon liquidation, dissolution or
winding up, to the Series B Preferred Stock (any such class or series
being referred to herein as "Junior Stock");
(b) declare or pay any dividend, or make any other distribution, on
any class or series of capital stock of the Corporation that ranks in
parity, either with respect to dividends or upon liquidation, dissolution
or winding up, with the Series B Preferred Stock (any such class or series
being referred to herein as "Parity Stock"), except dividends that are
paid ratably on all shares of Series B Preferred Stock on which dividends
are at the time accrued and payable and all shares of Parity Stock on
which dividends are at the time accrued and payable in proportion to the
total amounts of dividends at the time accrued and payable on all such
shares;
(c) redeem, purchase or otherwise acquire for consideration any
shares of Junior Stock, PROVIDED that the Corporation may at any time
redeem, purchase or otherwise acquire shares of Junior Stock in exchange
for shares of other Junior Stock; or
(d) redeem, purchase or otherwise acquire for consideration any
shares of Series B Preferred Stock or any shares of Parity Stock, except
in accordance with an offer to purchase made in writing to all holders of
such shares upon terms that the Board, after considering the relative
rights and preferences of the respective series and classes of such
shares, considers in good faith will result in fair and equitable
treatment among the holders of such shares.
Section 4. REACQUIRED SHARES. Any shares of Series B Preferred Stock that
are purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. Upon their
cancellation, all of such shares shall become authorized but unissued shares of
Preferred Stock and thereafter may be issued as part of another series of
Preferred Stock, subject to the rights of holders (if any) of shares of Series B
Preferred Stock set forth in these resolutions.
Section 5. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
dissolution or winding up of the Corporation:
(a) no distribution shall be made to the holders of shares of Junior
Stock unless, prior to such distribution, the Corporation shall have paid
to each holder of shares of Series B Preferred Stock the sum of (i) $100
per share of Series B Preferred Stock held by such holder (such amount per
share being referred to herein as the "Preference Amount") plus (ii) the
total amount of all dividends at the time accrued and payable on all
shares of Series B Preferred Stock held by such holder;
(b) no distribution shall be made to the holders of shares of Parity
Stock, except distributions that are made ratably on both all shares of
Series B Preferred Stock and all shares of Parity Stock in proportion to
the total amounts to which the holders of all such shares are entitled
upon such liquidation, dissolution or winding up; and
(c) each holder of shares of Series B Preferred Stock shall be
entitled to receive the sum of (i) the total amount of all dividends at
the time accrued and payable on all shares of Series B Preferred Stock
held by such holder plus (ii) an aggregate amount per share (such amount
per share being referred to herein as the "Distributable Amount"),
inclusive of the Preference Amount but subject to the provision for
adjustment set forth in the next succeeding sentence, of Series B
Preferred Stock held by such holder that is equal to 1,000 times the
aggregate per share amount to be distributed to holders of shares of
Common Stock upon such liquidation, dissolution or winding up.
In the event that the Corporation shall at any time after May 5, 1999, (1)
declare a dividend on the Common Stock that is payable in shares of Common
Stock, (2) reclassify the Common Stock or (3) otherwise effect a split-up,
division or combination of shares of Common Stock, then in each such case the
Distributable Amount to which a holder of shares of Series B Preferred Stock was
entitled immediately prior to such event shall be adjusted by multiplying such
Distributable Amount by a fraction, the numerator of which shall be the number
of shares of Common Stock that are outstanding immediately after such event and
the denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 6. CONSOLIDATION, MERGER, ETC. If the Corporation shall enter into
any consolidation, merger, share exchange or other transaction in which all
outstanding shares of Common Stock are
exchanged for or changed into other securities, cash, other property or any
combination thereof, then each outstanding share of Series B Preferred Stock
shall at the same time be similarly exchanged for or changed into an amount per
share, subject to the provision for adjustment set forth in the next succeeding
sentence, equal to 1,000 times the aggregate amount of securities, cash and
other property for which each outstanding share of Common Stock is exchanged or
into which each outstanding share of Common Stock is changed. In the event that
the Corporation shall at any time after May 5, 1999, (1) declare a dividend on
the Common Stock that is payable in shares of Common Stock, (2) reclassify the
Common Stock or (3) otherwise effect a split-up, division or combination of
shares of Common Stock, then in each such case the amount per share for which
Series B Preferred Stock would be exchanged, or into the amount which Series B
Preferred Stock would be changed, immediately prior to such event under the
immediately preceding sentence of this Section 7, shall be adjusted by
multiplying such amount by a fraction, the numerator of which shall be the
number of shares of Common Stock that are outstanding immediately after such
event and the denominator of which shall be the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 7. REDEMPTION. The shares of Series B Preferred Stock shall not be
redeemable.
Section 8. RANKING. The Series B Preferred Stock shall rank junior to each
other series of Preferred Stock, both with respect to dividends and upon
liquidation, dissolution or winding up, unless the statement of resolution
establishing such other series of Preferred Stock shall provide otherwise.
Section 9. AMENDMENT. If any share or fraction of a share of Series B
Preferred Stock is outstanding, neither the Third Amended and Restated Articles
of Incorporation of the Corporation nor the resolution or resolutions of the
Board providing for the issuance of shares of Preferred Stock (including but not
limited to these resolutions) shall be amended in any manner that would
materially alter or change the powers, preferences or rights of holders of
shares of Series B Preferred Stock so as to affect such holders adversely unless
that amendment shall have received the affirmative vote of the holders of a
majority of the outstanding shares of Series B Preferred Stock voting separately
as a class. Notwithstanding the foregoing provisions of this Section 10, whether
or not a share or a fraction of a share of Series B Preferred Stock is
outstanding, (a) the Board may from time to time provide by resolution or
resolutions for the issuance of shares of Preferred Stock of one or more series
that rank prior to the Series B Preferred Stock, either with respect to
dividends or upon liquidation, dissolution or winding up, or both with respect
to dividends and upon liquidation, dissolution or winding up, and (b) no vote or
consent of any holder of shares of Series B Preferred Stock shall be required
either as a condition to the adoption of such resolution or resolutions or as a
condition to the issuance of such shares of Preferred Stock.
Section 10. FRACTIONAL SHARES. Series B Preferred Stock may be issued in
fractions of a share. Each holder of a fraction of a share of Series B Preferred
Stock shall be entitled to exercise voting rights, to receive dividends and
other distributions, and to have all other rights of the holders of whole shares
of Series B Preferred Stock in proportion to the fraction of a share of Series B
Preferred Stock held by that holder.
RESOLVED FURTHER, that the appropriate officers of the Corporation are
authorized to make such filings and to take any other actions they deem
necessary to effect the foregoing resolution.
Dated: May 5, 1999 THE MERIDIAN RESOURCE CORPORATION
By: /S/ JOSEPH A. REEVES, JR.
Name: JOSEPH A. REEVES, JR.
Title: CHIEF EXECUTIVE OFFICER