SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant X
Filed by a Party other than the Registrant
Check the appropriate box:
X Preliminary Information Statement
Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
Definitive Information Statement
MIDCOAST ENERGY RESOURCES, INC.
(Name of Registrant as Specified In Its Charter)
MIDCOAST ENERGY RESOURCES, INC.
(Name of Person(s) Filing Information Statement)
Payment of Filing Fee (Check the appropriate box):
X $125 per Exchange Act Rules 0-11(c)(1)(ii) or 14c-5(g).
Fee computed on table below per Exchange Act Rules 14c-5(g)
and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:1
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
Set forth the amount on which the filing fee is calculated and
state how it was determined.
Fee paid previously with preliminary material.
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
MIDCOAST ENERGY RESOURCES, INC.
1100 Louisiana, Suite 2950
Houston, Texas 77002
_______________________________
INFORMATION STATEMENT REGARDING CONSENT OF STOCKHOLDERS
GIVEN ON MAY 13 AND MAY 28, 1996
____________________________
This Information Statement is being furnished to the
stockholders of Midcoast Energy Resources, Inc., a Nevada
corporation (the "Company"), in connection with two recently
executed written consents of the Company's stockholders relating to
amendments to the Company's Articles of Incorporation (the
"Charter"). The Board of Directors of the Company (the "Board"),
by a written consent dated as of May 13, 1996, and Magic Gas Corp.
(f/k/a/ Midcoast Natural Gas, Inc.), Stevens G. Herbst and Kenneth
B. Holmes, Jr., stockholders of the Company who own shares which
together represent 78.7% of the issued and outstanding shares of
the Company's common stock (collectively, the "Consenting
Stockholders"), by a written consent dated as of May 28, 1996,
approved an amendment to the Charter to increase the authorized
number of shares of the Company's common stock from 6,000,000
shares to 10,000,000 shares. Furthermore, the Board and
Consenting Stockholders entered into a joint written consent, dated
as of May 28, 1996, which approved an amendment to the Charter to
eliminate the class of preferred stock from the Company's
authorized capital stock. A Certificate of Amendment effecting the
changes prescribed by the above amendments (the "Charter
Amendments") will be filed with the Nevada Secretary of State on
July 1, 1996.
ACCORDINGLY, YOUR CONSENT IS NOT REQUIRED FOR PASSAGE OF THE
CHARTER AMENDMENTS AND IS NOT BEING SOLICITED BY THE COMPANY. IN
ADDITION, THE COMPANY IS NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND A PROXY. NO MEETING IS BEING HELD; THIS
INFORMATION STATEMENT IS BEING SENT TO INFORM YOU OF THE AMENDMENTS
AS REQUIRED BY FEDERAL SECURITIES LAWS.
The Board and Consenting Stockholders have approved the
Charter Amendments in connection with the Company's filing of a
registration statement on Form SB-2 under the 1933 Securities and
Exchange Act, as amended (the "Securities Act"), on May 28, 1996
(the "Registration Statement") pertaining to the public offering of
1,150,000 shares of the Company's common stock, par value $.01 per
share (the "Common Stock"). In addition to the Charter
Amendments, the Board has approved a 4.460961-for-1 stock split in
the Common Stock, also in connection with the aforementioned public
offering, to occur immediately prior to the effective date of the
Registration Statement. A record date for the purposes of
calculating shares to be issued pursuant to this stock split will
be selected in the near future, and the Company's stockholders will
be advised of the completion of this stock split at that time. As
discussed below, the Company feels that the Charter Amendments and
the stock split will provide the Company with a capital structure
that will permit this public offering to be consummated.
This Information Statement concerning the Charter Amendments
is being mailed on or about June 10, 1996 to all stockholders of
record. The Board has fixed the close of business on May 3, 1996,
as the record date (the "Record Date") for the determination of
stockholders. As of the Record Date, there were outstanding
335,388 shares of Common Stock of the Company, which does not
reflect the effect of the 4.460961 stock split.
<PAGE>
Principal Stockholders
The following table sets forth information based upon the
records of the Company and filings with the Commission as of May
15, 1996, with respect to (i) each person known to be the
beneficial owner of more than 5% of the Company's Common Stock,
(ii) each executive officer and director of the Company, and (iii)
all directors and executive officers as a group. Unless otherwise
indicated, all share information contained in this Information
Statement gives effect to the 4.460961-for-1 stock split.
<TABLE>
<CAPTION>
Common Stock
<S> <C> <C> <C>
Number of Percent of Percentage After
Name and Address Shares Outstanding Offering (2)
of Beneficial Owner Owned (1) Shares
Magic Gas Corp.(3) . . . . . . . . . . . . . . . . . 611,240 40.7 24.4
1100 Louisiana, Suite 2950
Houston, Texas 77002
Dan C. Tutcher(4). . . . . . . . . . . . . . . . . . 611,240 40.7 24.4
1100 Louisiana, Suite 2950
Houston, Texas 77002
Stevens G. Herbst(5) . . . . . . . . . . . . . . . . 285,902 19.1 11.4
710 Buffalo, Suite 800
Corpus Christi, Texas 78401
Kenneth B. Holmes, Jr. . . . . . . . . . . . . . . . 283,195 18.9 11.3
710 Buffalo, Suite 800
Corpus Christi, Texas 78401
I.J. Berthelot, II (6)(7). . . . . . . . . . . . . . 78,064 5.2 3.1
1100 Louisiana, Suite 2950
Houston, Texas 77002
Richard A. Robert(8) . . . . . . . . . . . . . . . . 22,303 1.5 *
1100 Louisiana, Suite 2950
Houston, Texas 77002
Duane S. Herbst(9) . . . . . . . . . . . . . . . . . 11,151 * *
710 Buffalo, Suite 800
Corpus Christi, Texas 78401
E.P. Marinos(10) . . . . . . . . . . . . . . . . . . 2,007 * *
2901 Sargent Street
Seabrook, Texas 77586
Richard A. Richards(10). . . . . . . . . . . . . . . 2,007 * *
18610 Upper Bay Road
Houston, Texas 77058
All Directors and Executive Officers as a 1,295,869 86.4 51.8
group (8 persons)
</TABLE>
* Denotes less than 1%.
(1) Except as otherwise noted, shares beneficially owned by each
person as of the record date were owned of record and each
person had sole voting and investment power with respect to
all shares beneficially held by such person.
(2) Excludes the issuance of shares of Common Stock on exercise
of the over-allotment option granted to the Underwriters.
(3) All of the outstanding stock of Magic is owned by Dan C.
Tutcher and Kimberly Tutcher as husband and wife.
(4) Includes 611,240 shares of Common Stock held of record by
Magic, an affiliate of Mr. Tutcher.
(5) Includes 4,460 shares held of record by Rainbow which is
controlled by Stevens G. Herbst.
(6) Includes 50,185 shares which are subject to certain vesting
requirements.
(7) Mr. Berthelot holds 1,338 shares as custodian for minor
children under the Uniform Gift to Minors Act.
(8) Includes 15,613 shares which are subject to certain vesting
requirements.
(9) Includes 4,014 shares which are subject to certain vesting
requirements.
(10) Messrs. Marinos and Richards have agreed to serve as
directors of the Company commencing prior to the date the
Registration Statement is declared effective and will each be
issued a stock grant of 2,007 shares on the effective date of
their service as directors.
CHARTER AMENDMENTS
Increase Authorized Shares of Common Stock
The Board and Consenting Stockholders have approved, by
written consent pursuant to Sections 78.315 and 78.320 of the
Nevada General Corporation Law (the "NGCL"), respectively, an
amendment to increase the authorized number of shares of Common
Stock from 6,000,000 shares to 10,000,000 shares. The Board and
the Consenting Stockholders believe there is an insufficient number
of shares of the stock available for effecting possible future
transactions, such as the conversion of other securities that may
be issued by the Company, stock dividends, stock splits, financing
arrangements, acquisitions by the Company of other businesses if
favorable acquisitions become available, or other ventures using
the Company's equity securities as consideration. This problem of
having an inadequate number of shares available for issuance was
increased by the Company's proposed public offering of 1,150,000
shares noted above. The additional shares of Common Stock
authorized by the Charter Amendments will be available for issuance
at any time in the future upon a determination by the Board of
Directors that a proposed issuance is in the best interest of the
Company. These future issuances will not require further
shareholder approval, unless such approval is required by law, as
in the case of consolidations and certain statutory mergers, or by
the rules of any securities exchanges on which the Common Stock is
then listed. Except with respect to the shares of Common Stock
issuable on the exercise of outstanding options and warrants, the
Company has no present plans for issuance of any of the additional
shares of Common Stock to be authorized by the Charter Amendments.
If additional shares of Common Stock are not authorized for
issuance through adoption of the Charter Amendments, significant
future issuances could not be effected without the expense and
delay associated with soliciting further action by stockholders at
a special meeting. Holders of the Common Stock have no preemptive
right to purchase or otherwise acquire any shares of the stock that
may be issued in the future. The Board believes that this
amendment will provide the Company with an adequate number of
available shares for the foreseeable future after the completion of
the public offering noted above.
Elimination of Preferred Stock
The Board and Consenting Stockholders have approved, by
written consent pursuant to Sections 78.315 and 78.320 of the NGCL,
respectively, an amendment to eliminate the class of preferred
stock, par value $1 per share (the "Preferred Stock") from the
Company's authorized capital stock. The Company's Charter
currently authorizes the issuance of one million shares of
Preferred Stock, par value $1.00 per share. Since the Company's
incorporation in 1992, pursuant to the Charter the Board has the
authority to cause the Company to issue its Preferred Stock in one
or more series, to designate the number of shares constituting any
series, and to fix the rights, preferences, privileges and
restrictions thereof, including dividend rights, voting rights,
redemption and conversion rights and liquidation preferences of
such series, without further action by the stockholders. Prior to
May 1996, there were 200,000 shares outstanding of the Preferred
Stock. The Preferred Stock paid quarterly dividends based on the
annual rate of 5% of the stated liquidation value and was
redeemable in whole or in part at the Company's option at a price
per share based on the liquidation value ($5.91 per share). The
Preferred Stock voted as a separate class with respect to any
change in the preferences or other rights attributable to the
Preferred Stock. Upon the failure to declare or pay quarterly
dividends for two consecutive quarterly periods, the holders of the
Preferred Stock also were given the right to elect one director
until such time as all accrued dividends are paid. In May 1996,
however, the Board approved the redemption of all outstanding
shares of the Preferred Stock for $118,367, which represents 10% of
the liquidation value. At present, no shares of the Preferred
Stock are issued and outstanding and management does not foresee
the Company's need to issue additional shares of its Preferred
Stock. The Company believes that elimination of the Preferred
Stock from the Charter will alleviate questions regarding the
potential issue of Preferred Stock with dividend, liquidation or
voting rights that are senior to the Common Stock, and thereby
enhance the completion of the public offering of Common Stock noted
above.
Adoption of Charter Amendments
By resolutions dated as of May 13, 1996 and May 28, 1996, the
Consenting Stockholders gave their written consent to the adoption
of the Charter Amendments and the subsequent filing of the
Certificate of Amendment with the Nevada Secretary of State on July
1, 1996. THEREFORE, NO FURTHER STOCKHOLDER CONSENTS ARE REQUIRED.
By Order of the Board of Directors
Duane S. Herbst
Secretary
Houston, Texas
May 30, 1996
