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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: (Date of earliest event reported): September 23, 1999
MIDCOAST ENERGY RESOURCES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 0-8848 76-0378638
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1100 LOUISIANA, SUITE 2950, HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 650-8900
N/A
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
At the annual meeting of shareholders of Midcoast Energy Resources, Inc., a
Nevada corporation (the "Company") held on May 17, 1999, the shareholders of the
Company approved a proposal to reincorporate the Company under the laws of the
state of Texas. Specifically, shareholders that owned shares representing
approximately 76.2% of the issued and outstanding shares of the Company voted in
favor of the proposal. Previously, the Board of Directors had approved of the
proposal and recommended it to the shareholders in a unanimous written consent
dated as of February 22, 1999.
Midcoast Pipeline, Inc., a Texas corporation and a wholly-owned subsidiary
of the Company (the "Texas Corporation"), was formed in order to effect the
reincorporation merger. By a joint unanimous written consent of its sole
shareholder and director dated as of September 22, 1999, the Texas Corporation
approved of the reincorporation proposal.
In order to accomplish the Reincorporation in accordance with the laws of
the States of Nevada and Texas, the the Company merged (the "Merger") with and
into the Texas Corporation, pursuant to the terms and provisions of the Plan and
Agreement of Merger (the "Merger Plan") dated as of September 22, 1999, which
has been entered into by the Company and the Texas Corporation and is filed as
Exhibit 2.1 hereto. The merger was consummated with the filing of articles of
merger in Nevada and Texas on September 23, 1999. Under Nevada law, shareholders
who opposed the Merger did not have dissenters' rights under the Nevada Private
Corporation Law because the common stock of the Company is listed on the AMEX.
Under the terms of the Merger Plan, the Texas Corporation was the surviving
corporation; the separate corporate existence of the Company ceased; the Texas
Corporation succeeded to all of the business, properties, assets, and
liabilities of the Company; the directors, officers, and employees of the
Company became the directors, officers, and employees of the Texas Corporation;
each outstanding share of common stock of the Company automatically converted
into one share of the Texas Corporation common stock. After the completion of
the change of domicile via the Merger, the surviving corporation was governed by
the articles of incorporation (the "Articles of Incorporation") and the bylaws
(the "Bylaws") of the Texas Corporation. The Articles of Incorporation and
Bylaws of the Texas Corporation have been filed herewith as Exhibits 3.1 and
3.2, respectively. According to Nevada and Texas law, the Merger became
effective (the "Effective Date") immediately upon filing of the Nevada and Texas
Articles of Merger. Immediately following the Merger and at the Effective Time,
all stock certificates which represented shares of common stock of the Company
automatically represented and evidenced ownership of shares of common stock of
the Texas Corporation.
DESCRIPTION OF CAPITAL STOCK AFTER THE MERGER
Under the Articles of Incorporation and Bylaws of the Texas Corporation,
the authorized capital stock of the Company consists of 31,250,000 shares of
common stock, par value $.01 per share (the "Common Stock"), and 5,000,000
shares of preferred stock, par value $.001 per share (the "Preferred Stock").
As of the Effective Date, the Company will have approximately 10,719,480 shares
of Common Stock and no (0) shares of Preferred Stock outstanding, and will have
reserved
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approximately 309,380 shares of Common Stock for issuance upon exercise of
outstanding options and 480,564 shares of Common Stock for issuance upon
exercise of outstanding warrants.
Common Stock Under the Articles of Incorporation and Bylaws of the Texas
Corporation. The holders of Common Stock are entitled to one vote per share
with respect to all matters required by law to be submitted to the stockholders
of the Company. The holders of Common Stock have the sole right to vote, except
as otherwise provided by law or by the Company's Articles of Incorporation. The
Common Stock does not have any cumulative voting rights. A majority of the
issued and outstanding Common Stock constitutes a quorum at any meeting of
stockholders and the vote by the holders of a majority of the outstanding shares
is required to effect certain fundamental corporate changes such as liquidation,
merger or amendment of the Articles of Incorporation.
Holders of shares of Common Stock are entitled to receive dividends, if,
as, and when declared by the Board out of funds legally available therefore.
Upon liquidation of the Company, holders of shares of Common Stock are entitled
to share ratably in all assets of the Company remaining after payment of
liabilities. Holders of shares of Common Stock have no preemptive rights or
other rights to subscribe for unissued or treasury shares or securities
convertible into shares. The outstanding shares of Common Stock are fully paid
and nonassessable.
Preferred Stock Under the Certificate of Incorporation and Bylaws of the
Delaware Corporation. The Board of Directors of the Company, without any action
by the stockholders of the Company, is authorized to issue up to a total of
5,000,000 shares of Preferred Stock in one or more series and to determine the
powers, preferences and rights and the qualifications, limitations or
restrictions, of the authorized and unissued preferred stock. The Board of
Directors could issue a series of Preferred Stock that could, depending on the
terms of such series, provide for a liquidation preference over the Common Stock
or impede the completion of a merger, tender offer or other takeover attempt.
The Board of Directors, in so acting, could issue Preferred Stock having terms
that discourage an acquisition attempt through which an acquiror may be
otherwise able to change the composition of the Board of Directors, including a
tender or exchange offer or other transaction that some, or a majority, of the
Texas Corporation's stockholders might believe to be in their best interest. As
of the date of this Report, no series of Preferred Stock has been so established
by the Board of Directors.
CERTAIN OF THE RIGHTS OF STOCKHOLDERS
The Company was incorporated under the laws of the State of Nevada, and the
Texas Corporation is incorporated under the laws of the State of Texas. The
Company's shareholders, whose rights as shareholders were governed by Nevada law
and the Company's artiticles of incorporation and bylaws (collectively, the
"Nevada Charter Documents"), became, upon consummation of the Merger,
shareholders of the Texas Corporation whose rights are now governed by Texas law
and the Texas Corporation's Articles of Incorporation and Bylaws (collectively,
the "Texas Charter Documents"). The following summary does not purport to be a
complete statement of the rights of the Texas Corporation's shareholders as
governed by applicable Texas law and the Texas Charter Documents and is
qualified in its entirety by the Texas Business Corporations Act (the "TBCA") to
which shareholders are referred. Generally, the provisions of the Texas Charter
Documents are similar to those of the Nevada Charter Documents in many respects.
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Charter Amendments. Under Texas law, an amendment to the articles of
incorporation requires the approval of the holders of at least two-thirds of the
outstanding shares of the corporation, unless a different amount, not less than
a majority, is specified in the articles of incorporation. The holders of the
outstanding shares of a particular class are entitled to vote as a class on a
proposed amendment if the amendment would alter or change the power, preferences
or special rights of one or more series of any class so to affect them
adversely. The Articles or Incorporation provide for a majority vote to amend
the articles of incorporation.
Bylaw Amendments. Texas law provides that the power to adopt, amend or
repeal the bylaws may be reserved exclusively to the board of directors. The
Articles of Incorporation reserve the power to adopt, amend or repeal the bylaws
to the board of directors.
Shareholder Vote for Mergers and Other Corporate Reorganizations. Under
Texas law, stockholders have the right to vote on all mergers (except for
parent-subsidiary mergers in which the parent owns at least 90% of the
subsidiary) to which the corporation is a party. In certain circumstances,
different classes of securities may be entitled to vote separately as classes
with respect to such transactions. Unless the articles of incorporation provide
otherwise, approval of the holders of at least two-thirds of all outstanding
shares entitled to vote is required by Texas law to approve a merger. Unless the
articles of incorporation provide otherwise, the approval of the stockholders of
the corporation in a merger is not required under Texas law if: (i) the
corporation is the sole surviving corporation in the merger; (ii) there is no
amendment to the corporation's articles of incorporation; (iii) each stockholder
holds the same number of shares after the merger as before, with identical
designations, preferences, limitations and relative rights; (iv) the voting
power of the shares outstanding after the merger plus the voting power of the
shares issuable as a result of the merger (taking into account convertible
securities and warrants, options or other rights to purchase securities issued
pursuant to the merger) does not exceed the voting power of the shares
outstanding prior to the merger by more than 20%; (v) the number of
participating shares (that is, shares whose holders are entitled to participate
without limitation in dividends or other distributions) outstanding after the
merger plus the participating shares issuable as a result of the merger (taking
into account convertible securities and warrants, options or other rights to
purchase securities issued pursuant to the merger) does not exceed the number of
participating shares outstanding prior to the merger by more than 20%; and (vi)
the board of directors of the corporation adopts a resolution approving the
plan of merger. The Articles of Incorporation require a majority vote for the
approval of a merger.
Business Combinations. Texas corporations are subject to the provisions of
Part Thirteen of the TBCA. That section provides that a corporation shall not,
directly or indirectly, enter into or engage in a business combination with an
affiliated stockholder, or any affiliate or associate of the affiliated
stockholder, during the three-year period immediately following the affiliated
stockholder's share acquisition date unless: (1) the business combination or the
purchase or acquisition of shares made by the affiliated stockholder on the
affiliated stockholder's share acquisition date is approved by the board of
directors of the issuing public corporation before the affiliated stockholder's
share acquisition date; or (2) the business combination is approved, by the
affirmative vote of the holders of at least two-thirds of the outstanding voting
shares of the issuing public corporation not beneficially owned by the
affiliated stockholder or an affiliate or associate of the affiliated
stockholder, at a meeting of stockholders and not by written consent, duly
called for that purpose not less than six months after the affiliated
stockholder's share acquisition date. An
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"affiliated stockholder" is defined as a person, other than the issuing public
corporation or a wholly-owned subsidiary of the issuing public corporation, that
is the beneficial owner of 20 % or more of the outstanding voting shares of the
issuing public corporation or that, within the preceding three-year period, was
the beneficial owner of 20 % or more of the then outstanding voting shares of
the issuing public corporation. Part Thirteen further provides that where it
specifies a particular stockholder vote required to approve a matter, a
provision in the certificate of incorporation or bylaws may require a greater,
but not a lesser, vote. However, a corporation may elect not to be governed by
Part XIII, and the Texas Corporation has a provision in its Bylaws opting out of
Part III of the TBCA.
Sales, Leases, Exchanges or Other Dispositions. In Texas, except as
otherwise provided in the articles of incorporation, the sale, lease, exchange
or other disposition (not including any pledge, mortgage, deed of trust or trust
indenture, unless otherwise provided in the articles of incorporation) of all,
or substantially all, of the property and assets of a Texas corporation, if not
made in the usual and regular course of its business, requires the approval of
the holders of at least two-thirds of the outstanding shares of the corporation.
Furthermore, the transfer of substantially all of a corporation's assets to
wholly-owned subsidiaries in such a manner that the corporation continues to
indirectly engage in its business is deemed to be in the usual and regular
course of its business. However, the Articles of Incorporation require only a
majority vote.
Class Voting. Under Texas law, class voting is required in connection with
certain amendments of a corporation's articles of incorporation, a merger or
consolidation requiring stockholder approval if the plan of merger or
consolidation contains any provision which, if contained in a proposed amendment
to a corporation's articles of incorporation, would require class voting or
certain sales of all or substantially all of the assets of a corporation.
Vacancies. Under Texas law, vacancies during the year may be filled by the
affirmative vote of a majority of the remaining directors then in office, even
if less than a quorum or by election at an annual or special meeting of the
stockholders called for that purpose. Any director appointed shall hold office
for the unexpired term of his predecessor in office. The Articles of
Incorporation do not provide otherwise.
Removal of Directors. Under Texas law, the articles of incorporation or
bylaws may provide that holders of a number, but not less than a majority, of
voting shares of each class entitled to vote at an election of directors may
vote to remove any director or the entire board without cause unless (i) the
board is a classified board in which case, unless the articles of incorporation
provide otherwise, directors may be removed only for cause, (ii) the corporation
has cumulative voting in which case if less than the entire board is to be
removed, no director may be removed if the vote cast against his removal would
be enough to elect him, or (iii) a class or series of shares is entitled by the
articles of incorporation to elect one or more directors in which case only the
holders of that class or series shall be entitled to vote on removal of any
director elected by such holders. The Bylaws will allow for the removal of
directors by majority vote for cause, as defined in the Bylaws.
Actions by Written Consent of Shareholders. Unless the articles of
incorporation or bylaws provide otherwise, Texas law provides that any action
required or permitted to be taken at a meeting
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of the stockholders may be taken without a meeting if the holders of outstanding
stock having at least the minimum number of votes that would be necessary to
authorize or take such action at a meeting consents to the action in writing. In
addition, Texas law requires the corporation to give prompt notice of the taking
of corporate action without a meeting by less than unanimous written consent to
those stockholders who did not consent in writing. The Company is currently
prohibited from taking action by written consent in lieu of a meeting of the
stockholders as a condition of its Listing Agreement with AMEX. The Articles of
Incorporation of the Texas Corporation provide that stockholders cannot take
action without a meeting of stockholders.
Right to Call Special Meetings of Stockholders. Under Texas law, (1) the
president, the board of directors, or such other person or persons as may be
authorized in the articles of incorporation or (2) the holders of not less than
10% of all of the shares entitled to vote have the right to call a special
stockholders' meeting, unless the articles of incorporation provide for a number
of shares greater than or less than 10%, in which event, special meetings of the
stockholders may be called by the holders of at least the percentage of shares
so specified in the articles of incorporation, but in no event may the articles
of incorporation provide for a number of shares greater than 50% that would be
required to call a special meeting. The Articles of Incorporation require the
holders of 50% of the outstanding shares to call a special meeting.
INDEMNIFICATION OF DIRECTORS AND OFFICERS AFTER THE MERGER
The Articles of Incorporation and Bylaws of the Texas Corporation require
the Company to indemnify its directors and officers to the fullest extent
permitted under Texas law. The Articles of Incorporation limits the personal
liability of a director to the corporation or its shareholders to damages for:
(i) any breach of the director's duty of loyalty to the Corporation or its
shareholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) an act or omission
for which the liability of a director is expressly provided for by an applicable
statute, or (iv) any transaction from which the director derived an improper
personal benefit.
Furthermore, pursuant to certain indemnity agreements executed by each
current director and executive officer, the Company must indemnify, defend and
hold harmless its directors and officers from and against any loss, liability or
claim arising out of or relating to their capacities as such. There is in
effect for the Company an insurance policy providing directors and officers with
indemnification, subject to certain exclusions and to the extent not otherwise
indemnified by the Company, against loss (including expenses incurred in the
defense of actions, suits or proceedings in connection therewith) arising from
any negligent act, error, omission or breach of duty while acting in their
capacity as directors and officers of the Company. The policy also reimburses
the Company for liability incurred in the indemnification of its directors and
officers.
Summary of Texas Law. The following is a summary of the indemnification
provisions of Texas law.
Scope. A corporation is permitted to provide indemnification or
advancement of expenses, by a bylaw provision, agreement, security arrangement
or otherwise against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by the person in connection with the
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proceeding. However, if the person is found liable to the corporation, or if the
person is found liable on the basis he received an improper personal benefit,
indemnification under Texas law is limited in the reimbursement of reasonable
expenses and no indemnification will be available if the person is found liable
for willful or intentional misconduct.
Advancement of Expenses. Reasonable court costs and attorneys' fees
incurred by a director who was, is, or is threatened to be made, a named
defendant or respondent in a proceeding because the person is or was a director
of such corporation may be paid or reimbursed by the corporation in advance of
the final disposition of the proceeding after the corporation receives (i) a
written affirmation by the director of his good faith belief that he has met the
standard of conduct necessary for indemnification under Texas law and (ii) a
written undertaking by or on behalf of the director to repay the amount paid or
reimbursed if it is ultimately determined that he has not met those requirements
or indemnification for such expenses is precluded under Texas law.
Procedure for Indemnification. Texas law provides that a determination
that indemnification is appropriate under Texas law shall be made (i) by a
majority vote of a quorum consisting of directors who are not party to the
proceeding, (ii) if such a quorum cannot be obtained, by a special committee of
the board of directors consisting of at least two directors not party to the
proceeding, (iii) by special legal counsel, or (iv) by stockholder vote.
Mandatory Indemnification. Under Texas law, indemnification by the
corporation is mandatory only if the director is wholly successful on the merits
or otherwise, in the defense of the proceeding.
Insurance. Texas law allows a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation against any liability asserted against such person and
incurred by such person in such a capacity or arising out of his status as such
a person whether or not the corporation would have the power to indemnify him
against that liability. In addition, a corporation may also establish and
maintain arrangements, other than insurance, to protect these individuals,
including a trust fund or surety arrangement.
Standard of Care. In general, directors are charged with the duty in their
decision-making process and oversight responsibilities to act as would a
reasonably prudent person in the conduct of such person's own affairs.
Stockholder Reports. Texas law requires a report to the stockholders upon
indemnification or advancement of expenses.
Limited Liability of Directors. Texas law permits a corporation to
eliminate in its charter all monetary liability of a director to the corporation
or its stockholders for conduct in the performance of such director's duties.
However, Texas law does not permit any limitation of the liability of a director
for: (i) breaching the duty of loyalty to the corporation or its stockholders;
(ii) failing to act in good faith; (iii) engaging in intentional misconduct or
a known violation of law; (iv) engaging in a transaction from which the director
obtains an improper benefit; or (v) violating applicable statutes which
expressly provide for the liability of a director.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
The following exhibits are filed with this report on Form 8-K:
2.1 -- Plan and Agreement of Merger between the Company and the Texas
Corporation dated September 22, 1999.
3.1 -- Amended and Restated Articles of Incorporation for the Texas
Corporation filed on September 23, 1999 in Texas.
3.2 -- Bylaws of the Texas Corporation adopted on September 22, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MIDCOAST ENERGY RESOURCES, INC.
September 24, 1999 /s/ Richard A. Robert
--------------------------------------
Richard A. Robert,
Chief Financial Officer and Treasurer
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EXHIBITS
EXHIBIT NO.
2.1 -- Plan and Agreement of Merger between the Company and the Texas
Corporation dated September 22, 1999.
3.1 -- Amended and Restated Articles of Incorporation for the Texas
Corporation filed on September 23, 1999 in Texas.
3.2 -- Bylaws of the Texas Corporation adopted on September 22, 1999.
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EXHIBIT 2.1
PLAN AND AGREEMENT OF MERGER
This PLAN AND AGREEMENT OF MERGER (this "Merger Plan") is entered into on
this 22nd day of September, 1999, pursuant to Section 92A.100 of the Nevada
General Corporation Law, as amended (the "NGCL"), and Article 5.01 of the Texas
Business Corporation Act, as amended (the "TBCA"), by and between Midcoast
Energy Resources, Inc., a Nevada corporation ("Midcoast-NV"), and Midcoast
Pipeline, Inc., a Texas corporation ("Midcoast-TX"). Midcoast-NV and Midcoast-TX
are collectively referred to herein as the "Constituent Corporations."
W I T N E S S E T H:
Whereas, Midcoast-NV is a corporation duly organized and existing under the
laws of the State of Nevada, and has authorized capital stock of 31,250,000
shares of common stock, par value $.01 per share, and 5,000,000 shares of
preferred stock, par value $.001 per share;
Whereas, Midcoast-TX is a corporation duly organized and existing under the
laws of the State of Texas, and has authorized capital stock of 31,250,000
shares of common stock, par value $.01 per share, and 5,000,000 shares of
preferred stock, par value $.001 per share;
Whereas, the respective Boards of Directors of the Constituent Corporations
deem it advisable and in the best interests of the Constituent Corporations that
Midcoast-NV be merged with and into Midcoast-TX, with Midcoast-TX being the
surviving corporation (the "Merger"), as authorized by the laws of the State of
Nevada and the State of Texas, under and pursuant to the terms and conditions
hereinafter set forth, and the Board of Directors of each of the Constituent
Corporations has duly approved this Merger Plan and recommended its approval to
the stockholders of each of the Constituent Corporations; and
Whereas, for federal income tax purposes, it is intended that the Merger
qualify as a reorganization within the meaning of Sections 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended.
Now, therefore, in consideration of the mutual and dependent covenants and
agreements herein contained, and for the purpose of setting forth the terms and
conditions of the Merger, the mode of carrying the same into effect, and such
other details and provisions as are deemed necessary or desirable, the parties
hereto have agreed and do hereby agree, subject to the approval of this Merger
Plan by the requisite consent of the stockholders of each of the Constituent
Corporations, and subject to the conditions hereinafter set forth, as follows:
1. MERGER. At the Effective Time (as defined in Section 6 below) of the
Merger, Midcoast-NV shall be merged with and into Midcoast-TX, with Midcoast-TX
being the surviving corporation, which shall not be a new corporation, but which
shall continue its corporate existence as a Texas corporation to be governed by
the laws of the State of Texas.
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2. TERMS AND CONDITIONS OF MERGER. At the Effective Time of the Merger:
(a) The Constituent Corporations shall be a single corporation, which
shall be Midcoast-TX, the corporation designated herein as the surviving
corporation.
(b) The separate corporate existence of Midcoast-NV shall cease.
(c) Midcoast-TX shall thereupon and thereafter possess all the rights,
privileges, powers and franchises of a public as well as of a private nature,
and be subject to all the restrictions, disabilities and duties of each
Constituent Corporation; and all rights, privileges, powers and franchises of
each Constituent Corporation, and all property, real, personal and mixed, and
all debts due to any Constituent Corporation on whatever account, as well as for
stock subscriptions, and all other things in action or belonging to each
Constituent Corporation shall be vested in Midcoast-TX; and all property,
rights, privileges, powers and franchises, and all and every other interest
shall be thereafter as effectually the property of Midcoast-TX as they were of
the respective Constituent Corporations, and the title to any real estate vested
by deed or otherwise in the Constituent Corporations shall not revert or be in
any way impaired by reason of the Merger; but all rights of creditors and all
liens upon any property of the Constituent Corporations shall be preserved
unimpaired, and all debts, liabilities and duties of the respective Constituent
Corporation shall thenceforth attach to Midcoast-TX and may be enforced against
Midcoast-TX to the same extent as if said debts, liabilities and duties had been
incurred or contracted by it. Specifically, but not by way of limitation, any
action or proceeding, whether civil, criminal or administrative, pending by or
against either Constituent Corporation shall be prosecuted as if the Merger had
not taken place, or Midcoast-TX may be substituted in such action or proceeding.
(d) All corporate acts, plans, policies, contracts, approvals and
authorizations of the Constituent Corporations and their stockholders, Boards of
Directors, committees elected or appointed by their Boards of Directors,
officers and agents, which were valid and effective immediately prior to the
Effective Time of the Merger, shall be taken for all purposes as the acts,
plans, policies, contracts, approval and authorizations of Midcoast-TX and shall
be effective and binding thereon as the same were with respect to the
Constituent Corporations.
(e) The assets, liabilities, reserves and accounts of each Constituent
Corporation shall be recorded on the books of Midcoast-TX, the surviving
corporation, in accordance with generally accepted accounting principles, and
the capital surplus and retained earnings of Midcoast-TX, the surviving
corporation, shall be determined in accordance with generally accepted
accounting principles, by the Board of Directors of Midcoast-TX.
3. CANCELLATION OF MIDCOAST-TX STOCK. At the Effective Time, each share
of common stock, par value $.01 per share, of Midcoast-TX ("Midcoast-TX Common
Stock") then issued and outstanding shall, without any action on the part of the
sole stockholder thereof, be cancelled and cease to exist, and, at or before the
Effective Time, the stockholder of the then issued and outstanding shares of
Midcoast-TX Common Stock shall surrender each outstanding certificate or
certificates theretofore representing shares of Midcoast-TX Common Stock.
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4. MIDCOAST-NV COMMON STOCK. At the Effective Time of the Merger, each
share of common stock, par value $.01 per share, of Midcoast-NV ("Midcoast-NV
Common Stock") issued and outstanding immediately preceding the Effective Time
of the Merger shall, without any action on the part of the stockholders thereof,
be converted into an identical number of shares of Midcoast-TX Common Stock.
5. ARTICLES OF INCORPORATION, BYLAWS, DIRECTORS AND OFFICERS.
(a) The Articles of Incorporation of Midcoast-TX as existing and
constituted immediately prior to the Effective Time of the Merger shall, at and
after the Effective Time of the Merger, be and constitute the Articles of
Incorporation of Midcoast-TX, as the corporation surviving the Merger.
(b) The Bylaws of Midcoast-TX as existing and constituted immediately
prior to the Effective Time of the Merger shall, at and after the Effective Time
of the Merger, be and constitute the Bylaws of Midcoast-TX, as the corporation
surviving the Merger, until amended in the manner provided by law.
(c) The names and addresses of the persons who, upon the Effective
Time, shall constitute the board of directors of Midcoast-TX, as the corporation
surviving the Merger, and who shall hold office until their successor(s) are
elected and qualified, are as follows:
<TABLE>
<CAPTION>
NAME POSITION ADDRESS
- ------------------------ --------------------- --------------------------------
<S> <C> <C>
Dan C. Tutcher Chairman of the Board 1100 Louisiana, Suite 2950
Houston, TX 77002
I. J. Berthelot, II Director 1100 Lousiana, Suite 2950
Houston, TX 77002
Ted Collins, Jr. Director Collins & Ware, Inc.
508 West Wall Street, Suite 1200
Midland, TX 78701
Curtis J. Dufour, III Director 1374 U.S. Hwy 11
Petal, MS 39465
Richard N. Richards Director 5127 E. El Roble Street
Long Beach, CA 90815
Bruce M. Withers Director Withers Enterprises
67 Bridgeberry Place
The Woodlands, TX 77381
</TABLE>
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(d) The names and addresses of the persons who, upon the Effective
Time, shall constitute the officers of Midcoast-TX, as the corporation surviving
the Merger, and who shall hold office, subject to the bylaws of Midcoast-TX,
until their successor(s) are elected and qualified, are as follows:
<TABLE>
<CAPTION>
NAME POSITION ADDRESS
- ---------------------- --------------------------------------- --------------------------
<S> <C> <C>
Dan C. Tutcher President and Chief Executive Officer 1100 Louisiana, Suite 2950
Houston, Texas 77002
I. J. Berthelot, II Executive Vice President and Chief 1100 Louisiana, Suite 2950
Operating Officer Houston, Texas 77002
Richard A. Robert Chief Financial Officer and Treasurer 1100 Louisiana, Suite 2950
Houston, TX 77002
Duane Herbst Vice President of Corporate Affairs 710 Buffalo, Suite 800
and Secretary Corpus Christi, TX 78401
E. P. "Lou" Marinos Vice President of Administration 1100 Louisiana, Suite 2950
Houston, TX 77002
Bill Bray Vice President of Business Development 1100 Louisiana, Suite 2950
Houston, TX 77002
E. Chris Kaitson Assistant Secretary 1100 Louisiana, Suite 2950
Houston, TX 77002
</TABLE>
6. APPROVAL AND EFFECTIVE TIME OF MERGER. This Merger Plan shall be
submitted to the stockholders of each of the Constituent Corporations as
provided by the NGCL and the TBCA. After the approval of this Merger Plan by the
stockholders of each Constituent Corporation in accordance with the requirements
of the NGCL and the TBCA, all required documents shall be executed, filed and
recorded and all required acts shall be done in order to accomplish the Merger
under the provisions of the NGCL, the TBCA and this Merger Plan. The Merger
shall become effective upon the issuance of certificates of merger by each of
the Secretaries of State of the States of Nevada and Texas subsequent to the
filing of (i) Articles of Merger by the Constituent Corporations with Secretary
of State of the State of Texas and (ii) Articles of Merger by the Constituent
Corporations with the Secretary of State of the State of Nevada, which filings
shall occur on the date this Merger Plan is executed and delivered by the
parties hereto (the "Effective Time").
7. OTHER PROVISIONS.
(a) If at any time Midcoast-TX shall consider or be advised that any
further assignment or assurance in law or other action is necessary or desirable
to vest, perfect or confirm, or record or otherwise, in Midcoast-TX the title to
any property or rights of Midcoast-NV acquired or to be acquired by or as a
result of the Merger, the proper officers and directors of the Constituent
Corporations, respectively, shall be, and they hereby are, severally and fully
authorized to execute and deliver such deeds, assignments and assurances in law
and take such other action as may be necessary or proper in the name of
Midcoast-TX or Midcoast-NV to vest, perfect or confirm title to such property or
rights in Midcoast-TX and otherwise carry out the purposes of this Merger Plan.
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(b) This Merger Plan may be terminated at any time prior to the
Effective Time of the Merger, whether before or after action thereon by the
stockholders of the Constituent Corporations (if such stockholder approval is
required), by mutual consent of the Constituent Corporations, expressed by
action of their respective Boards of Directors.
(c) For the convenience of the parties and to facilitate the filing
and recording of this Merger Plan, any number of counterparts hereof may be
executed, and each such counterpart shall be deemed to be an original
instrument.
(d) This Merger Plan cannot be altered or amended except pursuant to
an instrument in writing signed on behalf of all parties hereto.
(e) Pusuant to NGCL (S) 92A.390, Midcoast-NV stockholders have no
dissenters rights because the Company's securities are listed on the AMEX.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Merger Plan to be
executed as of the date first above written.
MIDCOAST PIPELINE, INC.
A TEXAS CORPORATION
By: /s/ Dan C. Tutcher
------------------------------
Dan C. Tutcher
President and Secretary
MIDCOAST ENERGY RESOURCES, INC.
A NEVADA CORPORATION
By: /s/ Dan C. Tutcher
-------------------------------
Dan C. Tutcher
President and Chief Executive Officer
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EXHIBIT 3.1
AMENDED & RESTATED
ARTICLES OF INCORPORATION
OF
MIDCOAST ENERGY RESOURCES, INC.
(A TEXAS CORPORATION)
ARTICLE I
NAME
The name of the corporation is Midcoast Energy Resources, Incorporated (the
"Corporation").
ARTICLE II
REGISTERED OFFICE AND AGENT
The address of its registered office in the State of Texas is 1100
Louisiana, Suite 2950, Houston, Texas 77002. The name of its registered agent
at such address is Dan C. Tutcher.
ARTICLE III
PURPOSES
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the TBCA.
ARTICLE IV
AUTHORIZED CAPITAL STOCK
The aggregate number of shares of all classes of stock which the
Corporation shall have authority to issue is 36,250,000 shares, consisting of:
(i) 31,250,000 shares of common stock, par value $.01 per share (the "Common
Stock"), and (ii) 5,000,000 shares of preferred stock, par value $.001 per share
(the "Preferred Stock"). Shares of any class of capital stock of the
Corporation may be issued for such consideration and for such corporate purposes
as the Board of Directors of the Corporation (the "Board of Directors") may from
time to time determine.
A. COMMON STOCK. Each share of Common Stock of the Corporation shall have
identical rights and privileges in every respect. The holders of shares of
Common Stock shall be entitled to vote upon all matters submitted to a vote of
the shareholders of the Corporation and shall be entitled to one vote for each
share of Common Stock held. Subject to the prior rights and preferences, if
any, applicable to shares of any Preferred Stock or any series thereof, the
holders of shares of the Common Stock shall be entitled to receive such
dividends (payable in cash, stock, or otherwise) as may be declared thereon by
the Board of Directors at any time from time to time out of any funds of the
Corporation legally available therefor. Subject to the prior rights and
preferences, if any, applicable to shares of any Preferred Stock or any series
thereof, in the event of any voluntary
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or involuntary liquidation, dissolution, or winding-up of the Corporation, the
holders of shares of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation available for distribution to its
shareholders, ratably in proportion to the number of shares of the Common Stock
held by them. A liquidation, dissolution, or winding-up of the Corporation, as
such terms are used in this paragraph, shall not be deemed to be occasioned by
or to include any consolidation or merger of the Corporation with or into any
other corporation or corporations or other entity or a sale, lease, exchange, or
conveyance of all or a part of the assets of the Corporation.
B. PREFERRED STOCK. The Preferred Stock may be divided into and issued
from time to time in one or more series as may be fixed and determined by the
Board of Directors. The relative rights and preferences of the Preferred Stock
of each series shall be such as shall be stated in any resolution or resolutions
adopted by a majority vote of the Board of Directors setting forth the
designation of the series and fixing and determining the relative rights and
preferences thereof (a "Directors' Resolution"). The Board of Directors is
hereby authorized to fix and determine the powers, designations, preferences,
and relative, participating, optional or other rights, as between series and as
between the Preferred Stock or any series thereof and the Common Stock, and the
qualifications, limitations or restrictions thereof, if any, including, without
limitation, full or limited voting powers, preferential rights to receive
dividends or assets upon liquidation, rights of conversion or exchange into
Common Stock, Preferred Stock or any series of other securities, any right of
the Corporation to exchange or convert shares into Common Stock, Preferred Stock
or any series of other securities, or any redemption provision or sinking fund
provisions, all as shall be stated in a Directors' Resolution. The shares of
Preferred Stock or any series thereof may have full or limited voting powers, or
be without voting powers, all as shall be stated in a Directors' Resolution.
Except where otherwise set forth in the Directors' Resolution providing for the
issuance of any series of Preferred Stock, the number of shares comprising such
series may be increased or decreased (but not below the number of shares then
outstanding) from time to time by like action of the Board of Directors. The
shares of Preferred Stock of any one series shall be identical with the other
shares in the same series in all respects except as to the dates from and after
which dividends thereon shall cumulate, if cumulative.
C. REACQUIRED SHARES OF PREFERRED STOCK. Shares of any series of any
Preferred Stock that have been redeemed (whether through the operation of a
sinking fund or otherwise), purchased by the Corporation, or which, if
convertible or exchangeable, have been converted into, or exchanged for, shares
of stock of any other class or classes or any evidences of indebtedness shall
have the status of authorized and unissued shares of Preferred Stock and may be
reissued as a part of the series of which they were originally a part or may be
reclassified and reissued as part of a new series of Preferred Stock or as part
of any other series of Preferred Stock, all subject to the conditions or
restrictions on issuance set forth in the Directors' Resolution providing for
the issuance of any series of Preferred Stock and to any filing required by law.
D. INCREASE IN AUTHORIZED PREFERRED STOCK. The number of authorized
shares of Preferred Stock may only be increased or decreased by the affirmative
vote of the holders of a majority of the stock of the Corporation entitled to
vote without the separate vote of holders of Preferred Stock as a class.
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E. GENERAL. Subject to the foregoing provisions of these Articles of
Incorporation, the Corporation may issue shares of its Common Stock and
Preferred Stock from time to time for such consideration (not less than the par
value thereof) as may be fixed by the Board of Directors of the Corporation,
which is expressly authorized to fix the same in its absolute and uncontrolled
discretion subject to the foregoing conditions. Shares so issued for which the
full consideration shall have been paid or delivered to the Corporation shall be
deemed fully paid stock and shall not be liable to any further call or
assessment thereon, and the holders of such shares shall not be liable for any
further payments in respect of such shares. The Corporation shall have
authority to create and issue rights and options entitling their holders to
purchase shares of the Corporation's capital stock of any class or series or
other securities of the Corporation, and such rights and options shall be
evidenced by instrument(s) approved by the Board of Directors of the
Corporation. The Board of Directors of the Corporation shall be empowered to
set the exercise price, duration, times for exercise, and other terms of such
options or rights; provided, however, that the consideration to be received for
any shares of capital stock subject thereto shall not be less than the par value
thereof.
ARTICLE V
EXISTENCE
The existence of the Corporation is to be perpetual.
ARTICLE VI
NO PREEMPTIVE RIGHTS
No shareholder shall be entitled, as a matter of right, to subscribe for or
acquire additional, unissued or treasury shares of any class of capital stock of
the Corporation whether now or hereafter authorized, or any bonds, debentures or
other securities convertible into, or carrying a right to subscribe to or
acquire such shares, but any shares or other securities convertible into, or
carrying a right to subscribe to or acquire such shares may be issued or
disposed of by the Board of Directors to such persons and on such terms as in
its discretion it shall deem advisable.
ARTICLE VII
NO CUMULATIVE VOTING
At each election of directors, every shareholder entitled to vote at such
election shall have the right to vote in person or by proxy the number of shares
owned by him for as many persons as there are directors to be elected and for
whose election he has a right to vote. No shareholder shall have the right to
cumulate his votes in any election of directors.
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ARTICLE VIII
NO SHAREHOLDER ACTION WITHOUT A MEETING
Any action required or permitted to be taken by the shareholders of the
Corporation must be effected at an annual or special meeting of shareholders of
the Corporation and may not be effected by any consent in writing by such
shareholders, and, except as otherwise required by law, special meetings of the
shareholders of the Corporation may be called only by the Chairman of the Board,
the Chief Executive Officer, the President, the Board of Directors by the
written order of a majority of the entire Board of Directors, by such other
persons as may be set forth in the Bylaws of the Corporation (the "Bylaws"), or
by the holders of at least fifty percent of all of the shares entitled to vote
at the proposed special meeting.
ARTICLE IX
VOTE REQUIRED
Directors shall be elected by a plurality of the votes cast by the holders
of shares entitled to vote in the election of directors at a meeting of
shareholders at which a quorum is present. Except as otherwise required by law,
for any corporate action other than the election of directors that requires the
approval of the shareholders of the Corporation, including, but not limited to,
amendment of these Articles of Incorporation or any merger, reorganization,
dissolution or liquidation of the Corporation, the act of the shareholders shall
be the affirmative vote of the holders of a majority of the shares entitled to
vote on that matter and represented in person or by proxy at a meeting of
shareholders at which a quorum is present.
ARTICLE X
BOARD OF DIRECTORS
The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors. In addition to the authority and
powers conferred upon the Board of Directors by the TBCA or by the other
provisions of these Articles of Incorporation, the Board of Directors is hereby
authorized and empowered to exercise all such powers and do all such acts and
things as may be exercised or done by the Corporation, subject to the provisions
of the TBCA, these Articles of Incorporation and the Bylaws of the Corporation
(the "Bylaws"); provided, however, that no Bylaws hereafter adopted by the
shareholders of the Corporation, or any amendments thereto, shall invalidate any
prior act of the Board of Directors that would have been valid if such Bylaws or
amendment had not been adopted.
ARTICLE XI
INDEMNIFICATION
A. MANDATORY INDEMNIFICATION. Each person who at any time is or was a
director or officer of the Corporation, and is threatened to be or is made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative, arbitrative or investigative (a
"Proceeding"), by reason of the fact that such person is or was a director or
officer
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of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, partner, venturer, proprietor, member, employee, trustee,
agent or similar functionary of another domestic or foreign corporation,
partnership, joint venture, sole proprietorship, trust, employee benefit plan or
other for-profit or non-profit enterprise, whether the basis of a Proceeding is
an alleged action in such person's official capacity or in another capacity
while holding such office, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the TBCA, or any other
applicable law as may from time to time be in effect (but, in the case of any
such amendment or enactment, only to the extent that such amendment or law
permits the Corporation to provide broader indemnification rights than such law
prior to such amendment or enactment permitted the Corporation to provide),
against all expense, liability and loss (including, without limitation, court
costs and attorneys' fees, judgments, fines, excise taxes or penalties, and
amounts paid or to be paid in settlement) actually and reasonably incurred or
suffered by such person in connection with a Proceeding, and such
indemnification shall continue as to a person who has ceased to be a director or
officer of the Corporation or a director, officer, partner, venturer,
proprietor, member, employee, trustee, agent or similar functionary of another
domestic or foreign corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other forBprofit or nonBprofit
enterprise, and shall inure to the benefit of such person's heirs, executors and
administrators. The Corporation's obligations under this Section A include, but
are not limited to, the convening of any meeting, and the consideration of any
matter thereby, required by statute in order to determine the eligibility of any
person for indemnification.
B. PREPAYMENT OF EXPENSES. Expenses incurred by a director or officer of
the Corporation in defending a Proceeding shall be paid by the Corporation in
advance of the final disposition of such Proceeding to the fullest extent
permitted by, and only in compliance with, the TBCA or any other applicable laws
as may from time to time be in effect, including, without limitation, any
provision of the TBCA which requires, as a condition precedent to such expense
advancement, the delivery to the Corporation of an undertaking, by or on behalf
of such director or officer, to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not entitled to be
indemnified under Section A of this Article X or otherwise. Repayments of all
amounts so advanced shall be upon such terms and conditions, if any, as the
Corporation's Board of Directors deems appropriate.
C. VESTING. The Corporation's obligation to indemnify and to prepay
expenses under Sections A and B of this Article X shall arise, and all rights
granted to the Corporation's directors and officers hereunder shall vest, at the
time of the occurrence of the transaction or event to which a Proceeding
relates, or at the time that the action or conduct to which such Proceeding
relates was first taken or engaged in (or omitted to be taken or engaged in),
regardless of when such Proceeding is first threatened, commenced or completed.
Notwithstanding any other provision of these Articles of Incorporation or the
Bylaws, no action taken by the Corporation, either by amendment of these
Articles of Incorporation or the Bylaws or otherwise, shall diminish or
adversely affect any rights to indemnification or prepayment of expenses granted
under Sections A and B of this Article X which shall have become vested as
aforesaid prior to the date that such amendment or other corporate action is
effective or taken, whichever is later.
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D. ENFORCEMENT. If a claim under Section A or Section B or both Sections
A and B of this Article X is not paid in full by the Corporation within sixty
(60) days after a written claim has been received by the Corporation, the
claimant may at any time thereafter bring suit in a court of competent
jurisdiction against the Corporation to recover the unpaid amount of the claim
and, if successful in whole or in part, the claimant shall also be entitled to
be paid the expense of prosecuting such claim. It shall be a defense to any
such suit (other than a suit brought to enforce a claim for expenses incurred in
defending any Proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it permissible under
the TBCA or other applicable law to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Corporation.
The failure of the Corporation (including its Board of Directors, independent
legal counsel, or shareholders) to have made a determination prior to the
commencement of such suit as to whether indemnification is proper in the
circumstances based upon the applicable standard of conduct set forth in the
TBCA or other applicable law shall neither be a defense to the action nor create
a presumption that the claimant has not met the applicable standard of conduct.
The termination of any Proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which such
person reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal Proceeding, had reasonable cause
to believe that his conduct was unlawful.
E. NONEXCLUSIVE. The indemnification provided by this Article X shall not
be deemed exclusive of any other rights to which a person seeking
indemnification may be entitled under any statute, bylaw, other provisions of
these Articles of Incorporation, agreement, vote of shareholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office.
F. PERMISSIVE INDEMNIFICATION. The rights to indemnification and
prepayment of expenses which are conferred to the Corporation's directors and
officers by Sections A and B of this Article X may be conferred upon any
employee or agent of the Corporation if, and to the extent, authorized by the
Board of Directors.
G. INSURANCE. The Corporation shall have power to purchase and maintain
insurance, at its expense, on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, partner, venturer,
proprietor, member, employee, trustee, agent or similar functionary of another
domestic or foreign corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other for-profit or non-profit
enterprise against any expense, liability or loss asserted against such person
and incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under the
provisions of this Article X, the Bylaws, the TBCA or other applicable law.
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H. IMPLEMENTING ARRANGEMENTS. Without limiting the power of the
Corporation to procure or maintain insurance or other arrangement on behalf of
any of the persons as described in Section G of this Article X, the Corporation
may, for the benefit of persons eligible for indemnification by the Corporation,
(i) create a trust fund, (ii) establish any form of self-insurance, (iii) secure
its indemnity obligation by grant of a security interest or other lien on the
assets of the Corporation, or (iv) establish a letter of credit, guaranty or
surety arrangement.
ARTICLE XII
LIMITED DIRECTOR LIABILITY
No director of the Corporation shall be personally liable to the
Corporation or to its shareholders for monetary damages for breach of fiduciary
duty as a director, provided that this Article XI shall not eliminate or limit
the liability of a director: (i) for any breach of the director's duty of
loyalty to the Corporation or its shareholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) an act or omission for which the liability of a director is expressly
provided for by an applicable statute, or (iv) for any transaction from which
the director derived an improper personal benefit.
If the Texas Miscellaneous Corporation Laws Act or any other applicable law
is amended to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the such laws, as so amended. No amendment to or repeal of this Article XI will
apply to, or have any effect on, the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of the
director occurring prior to such amendment or repeal.
ARTICLE XIII
BYLAWS
Except as otherwise required by law, the Board of Directors is expressly
and exclusively authorized to adopt, amend or repeal the Bylaws, or adopt new
Bylaws, without any action on the part of the shareholders, and the shareholders
of the Corporation may not adopt, amend or repeal the Bylaws, or adopt new
Bylaws.
ARTICLE XIV
INITIAL CONSIDERATION FOR ISSUANCE OF SHARES
The Corporation shall not commence business until it has received for the
issuance of its shares consideration of at least $1,000, consisting of money,
labor done or property actually received.
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ARTICLE XV
INITIAL BOARD OF DIRECTORS
The name and mailing address of the initial member of the Board of
Directors is:
Dan C. Tutcher
1100 Louisiana, Suite 2950
Houston, Texas 77002
ARTICLE XVI
INCORPORATOR
The name and mailing address of the incorporator, the powers and authority
of whom shall cease upon the filing of these Articles of Incorporation, is:
Robert G. Reedy
Porter & Hedges, L.L.P.
700 Louisiana, 35th Floor
Houston, Texas 77002
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EXHIBIT 3.2
BYLAWS
OF
MIDCOAST ENERGY RESOURCES, INC.,
A TEXAS CORPORATION
ARTICLE I
OFFICES
Section 1. Principal Office. The principal office of Midcoast Energy
Resources, Inc. (the "Corporation") will be in Houston, Texas. The Board of
Directors of the Corporation (the "Board of Directors") may elect to relocate
the principal office of the Corporation from time to time as it shall deem
necessary and proper.
Section 2. Other Offices. The Corporation may also have offices at such
other places as the Board of Directors may from time to time determine or the
business of the Corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meetings. All meetings of the shareholders will be
held at the principal office of the Corporation, or at such other place as may
be determined by the Board of Directors and stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. An annual meeting of Shareholders shall be
held for the election of directors at such date, time and place as may be
designated by resolution of the Board of Directors from time to time; provided
that each successive annual meeting shall be held on a date within 13 months
after the date of the preceding annual meeting. Only such business shall be
conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be (a) specified in the
notice of meeting given by or at the direction of the Board of Directors, (b)
otherwise properly brought before the meeting or at the direction of the Board
of Directors, or (c) otherwise properly brought before the meeting by a
shareholder of the Corporation. For business to be properly brought before an
annual meeting by a shareholder, the shareholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation, not less than 120 days prior to
the anniversary date of the immediately preceding annual meeting; provided,
however, that in the event that the date of the annual meeting is changed by
more than 30 days from such anniversary date, notice by the shareholder to be
timely must be received not later than the close of business on the tenth day
following the earlier of the date on which a written statement setting forth the
date of such meeting was mailed to shareholders or the date on which it is first
disclosed to the public. A shareholder's notice to the Secretary shall set
forth as to each matter the shareholder proposes to bring before the annual
meeting: (a) a brief description of the business desired to be brought before
the annual meeting, (b) the name and address, as they appear on the
Corporation's books, of the shareholder
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proposing such proposal, (c) the class and number of shares of the Corporation
that are beneficially owned by the shareholder along with a written sttement
that the shareholder intends to continue to hold the securities through the date
of the meeting, and (d) any material interest of the shareholder in such
business. In addition, if the shareholder's ownership of shares of the
Corporation, as set forth in the notice, is solely beneficial, documentary
evidence of such ownership must accompany the notice. Notwithstanding anything
else in these Bylaws to the contrary, no business shall be conducted at an
annual meeting except in accordance with the procedures set forth in this
Section 2. The presiding officer of an annual meeting shall, if the facts
warrant, determine and declare to the meeting that any business that was not
properly brought before the meeting is out of order and shall not be transacted
at the meeting.
Section 3. Notice of Annual Meeting. Written or printed notice of the
annual meeting, stating the place, day and hour thereof, will be served upon or
mailed to each shareholder entitled to vote thereat at such address as appears
on the books of the Corporation, not less than ten days nor more than sixty days
before the date of the meeting.
Section 4. Special Meeting. Except as otherwise required by law or the
Articles of Incorporation, special meetings of the shareholders of the
Corporation may be called only by the Chairman of the Board of Directors (the
"Chairman of the Board"), the Chief Executive Officer, the President, the Board
of Directors by the written order of a majority of the entire Board of
Directors, or upon the written request of shareholders owning not less than
fifty percent of the shares of capital stock of the Corporation issued,
outstanding and entitled to vote at such meeting delivered to the President or
Secretary that states the purpose or purposes of the proposed meeting.
Section 5. Notice of Special Meeting. Written notice of a special meeting
of shareholders, stating the place, day and hour and purpose or purposes
thereof, will be served upon or mailed to each shareholder entitled to vote
thereat at such address as appears on the books of the Corporation, not less
than ten days nor more than sixty days before the date of the meeting.
Section 6. Business at Special Meeting. Business transacted at all
special meetings will be confined to the purpose or purposes stated in the
notice.
Section 7. Shareholder List. At least ten days before each meeting of
shareholders, a complete list of the shareholders entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical order, with the
address of and the number of shares held by each, will be prepared by the
Secretary. Such list, for a period of ten days prior to such meeting, will be
kept on file at the registered office of the Corporation and will be subject to
inspection by any shareholder at any time during usual business hours. Such
list will also be produced and kept open at the time and place of the meeting
and shall be subject to the inspection of any shareholder during the whole time
of the meeting.
Section 8. Quorum. The holders of a majority of the shares of capital
stock issued and outstanding and entitled to vote thereat, represented in person
or by proxy, will constitute a quorum at all meetings of the shareholders for
the transaction of business except as otherwise provided by law, the Articles of
Incorporation or these Bylaws. If, however, such quorum is not present or
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represented at any meeting of the shareholders, the shareholders entitled to
vote thereat, represented in person or by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At any such adjourned
meeting at which a quorum is represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
Section 9. Voting. Unless otherwise provided by law, the Articles of
Incorporation or these Bylaws, each shareholder will have one vote for each
share of stock having voting power, registered in his name on the books of the
Corporation. When a quorum is present at any meeting, the vote of the holders
of a majority of the shares having voting power represented in person or by
proxy and voted for or against or expressly abstained on any question will
decide such question brought before such meeting, unless the question is one
upon which, by express provision of law, the Articles of Incorporation or these
Bylaws, a different vote is required, in which case such express provision will
govern and control the decision of such question. In the case of a matter
submitted for a vote of the shareholders as to which a shareholder approval
requirement is applicable under the shareholder approval policy of any stock
exchange or quotation system on which the capital stock of the Corporation is
traded or quoted, the requirements under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any provisions of the Internal Revenue Code, in
each case for which no higher voting requirement is specified by the Texas
Business Corporation Act (the "TBCA"), the Articles of Incorporation or these
Bylaws, the vote required for approval shall be the requisite vote specified in
such shareholder approval policy, the Exchange Act or Internal Revenue Code
provision, as the case may be (or the highest such requirement if more than one
is applicable). Unless otherwise provided in the Articles of Incorporation or
these Bylaws in accordance with the TBCA, directors shall be elected by a
plurality of the votes cast by the holders of outstanding shares of capital
stock of the Corporation entitled to vote in the election of directors at a
meeting of shareholders at which a quorum is present.
Section 10. Proxies. At any meeting of the shareholders every shareholder
having the right to vote will be entitled to vote in person, or by proxy
appointed by an instrument in writing subscribed by such shareholder or his duly
authorized attorney in fact and bearing a date not more than eleven months prior
to said meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Powers. The business and affairs of the Corporation will be
managed by a Board of Directors. The Board of Directors may exercise all such
powers of the Corporation and do all such lawful acts and things as are not by
law, by the Articles of Incorporation or these Bylaws directed or required to be
exercised or done by the shareholders.
Section 2. Number of Directors. The number of directors which constitute
the whole Board of Directors will be no more than fifteen, as such number shall
be determined by resolution of the Board of Directors from time to time;
provided, however, that no decrease in the number of directors shall have the
effect of shortening the term of any incumbent director; provided further,
however, that from and after the first date as of which the Corporation has a
class or series of capital
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stock registered under the Exchange Act, the number of directors which shall
constitute the whole Board of Directors shall be not less than three.
Section 3. Nomination. Only persons who are nominated in accordance with
the procedures set forth in these Bylaws shall be eligible to serve as
directors. Nominations of persons for election to the Board of Directors of the
Corporation may be made at a meeting of shareholders (a) by or at the direction
of the Board of Directors or (b) by any shareholder of the Corporation who is a
shareholder of record at the time of giving of notice provided for in this
Section 3, who shall be entitled to vote for the election of directors at the
meeting and who complies with the notice procedures set forth in this Section 3.
Nominations by shareholders shall be made pursuant to timely notice in
writing to the Secretary of the Corporation. To be timely, a shareholder's
notice shall be delivered to or mailed and received at the principal executive
offices of the Corporation (a) in the case of an annual meeting, not less than
60 days nor more than 180 days prior to the first anniversary of the preceding
year's annual meeting; provided, however, that in the event that the date of the
annual meeting is changed by more than 30 days from such anniversary date,
notice by the shareholder to be timely must be so received not later than the
close of business on the tenth day following the earlier of the date on which a
written statement setting forth the date of such meeting was mailed to
shareholders or the date on which it is first disclosed to the public, and (b)
in the case of a special meeting at which directors are to be elected, not later
than the close of business on the tenth day following the earlier of the date on
which a written statement setting forth the date of such meeting was mailed to
shareholders or the date on which it is first disclosed to the public. Such
shareholder's notice shall set forth (a) as to each person whom the shareholder
proposes to nominate for election or reelection as a director all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Exchange Act (including such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director if elected); (b) as to the shareholder giving the notice
(i) the name and address, as they appear on the Corporation's books, of such
shareholder and (ii) the class and number of shares of the Corporation which are
beneficially owned by such shareholder and which are owned of record by such
shareholder; and (c) as to the beneficial owner, if any, on whose behalf the
nomination is made, (i) the name and address of such person and (ii) the class
and number of shares of the Corporation which are beneficially owned by such
person. At the request of the Board of Directors, any person nominated by the
Board of Directors for election as a director shall furnish to the Secretary of
the Corporation that information required to be set forth in a shareholder's
notice of nomination which pertains to the nominee.
The presiding officer of the meeting shall, if the facts warrant, determine
and declare to the meeting that a nomination was not made in accordance with the
procedures prescribed by this Section 3 and he shall so declare to the meeting,
and the defective nomination shall be disregarded.
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Section 4. Election and Term. Subject to the requirements of the Articles
of Incorporation, the directors shall be elected at the annual meeting of
shareholders, except as provided in Section 5, and each director elected shall
hold office until the expiration of his term and until his successor shall be
elected and shall qualify. Directors need not be residents of Texas or
shareholders of the Corporation.
Section 5. Vacancies. If any vacancy occurs in the Board of Directors
caused by death, resignation, retirement, disqualification, or removal from
office of any director, or otherwise, or if any new directorship is created by
an increase in the authorized number of directors, a majority of the directors
then in office, though less than a quorum, or a sole remaining director, may
choose a successor or fill the newly created directorship; and a director so
chosen shall hold office until his term expires and until his successor shall be
duly elected and shall qualify, unless sooner displaced.
Section 6. Resignation; Removal. Any director may resign at any time.
Unless otherwise prescribed by the Articles of Incorporation, a director may be
removed from office only for cause and then only by the affirmative vote of the
holders of at least a majority of the voting power of all outstanding shares of
capital stock of the Corporation generally entitled to vote in the election of
directors, voting together as a single class. Except as may otherwise be
provided by law, cause of removal of a director shall be deemed to exist only
if: (i) the director whose removal is proposed has been convicted, or where a
director is granted immunity to testify where another has been convicted, of a
felony by a court of competent jurisdiction and such conviction is no longer
subject to direct appeal; (ii) such director has been found by the affirmative
vote of a majority of the entire Board of Directors at any regular or special
meeting of the Board of Directors called for that purpose or by a court of
competent jurisdiction to have been grossly negligent or guilty of misconduct in
the performance of his duties to the Corporation in a matter of substantial
importance to the Corporation; or (iii) such director has been adjudicated by a
court of competent jurisdiction to be mentally incompetent, which mental
incompetency directly affects his ability as a director of the Corporation.
Section 7. Compensation. Directors, as such, shall receive such
compensation for their services and such reimbursement of expenses as shall be
determined by the Board of Directors.
ARTICLE IV
MEETINGS OF THE BOARD
Section 1. First Meeting. The Board of Directors may hold its first
meeting for the purpose of organization and the transaction of business, if a
quorum is present, immediately after and at the same place as the annual meeting
of the shareholders, and no notice of such meeting shall be necessary; or the
Board of Directors may meet at such place and time as is fixed by the consent in
writing of all the directors.
Section 2. Regular Meetings. Regular meetings of the Board of Directors
may be held at such time and place either within or without the State of Texas
and with such notice or without notice as is determined from time to time by the
Board of Directors.
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Section 3. Special Meetings. Special meetings of the Board of Directors
may be called by the President or the Chairman of the Board on one days notice
to each director, either personally or by mail or telegram. Special meetings
will be called by the President or the Chairman of the Board in like manner and
on like notice upon the written request of a majority of the Board of Directors.
Section 4. Quorum and Voting. At all meetings of the Board of Directors,
a majority of the directors will be necessary and sufficient to constitute a
quorum for the transaction of business; and the act of a majority of the
directors present at any meeting at which there is a quorum will be the act of
the Board of Directors, except as may be otherwise specifically provided by law,
the Articles of Incorporation or these Bylaws. If a quorum is not present at
any meeting of directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum is present.
Section 5. Telephone Meetings. The Board of Directors may hold meetings
in any manner permitted by law. Without limitation, at any meeting of the Board
of Directors, a director may attend by telephone, radio, television, interactive
media or similar means of communication by means of which all participants can
hear each other which permits him to participate in the meeting, and a director
so attending will be deemed present at the meeting for all purposes including
the determination of whether a quorum is present.
Section 6. Action by Written Consent. Any action required or permitted to
be taken by the Board of Directors or any committee of the Board of Directors
under applicable statutory provisions, the Articles of Incorporation, or these
Bylaws, may be taken without a meeting if a consent in writing, setting forth
the action so taken, is signed by all the members of the Board of Directors or
such committee, as the case may be, and filed with the minutes of the meetings
of the Board of Directors or such committee, as the case may be.
ARTICLE V
COMMITTEES
Section 1. Committees of Directors. The Board of Directors may establish
an Audit Committee and a Compensation Committee, and may establish an Executive
Committee and such other committees as may be established by resolution of a
majority of the whole Board of Directors. Each of such committees shall consist
of one or more members of the Board of Directors and shall have a chairman that
is selected by the Board of Directors. Members of committees of the Board of
Directors shall be elected annually by vote of a majority of the Board of
Directors. The Chief Executive Officer shall be an ex-officio nonvoting member
of each committee (except the Audit and Compensation Committees) of which he is
not an official voting member. With respect to any committee (including the
Audit and Compensation Committees) of which the Chief Executive Officer is not
an official voting member, the Chief Executive Officer shall be given notice of
all committee meetings at the same time notice is given to committee members,
and the Chief Executive Officer shall be afforded the opportunity to speak at
the committee meeting. Presence of a majority of the committee members (not
counting any ex-officio nonvoting members) shall constitute a quorum.
Committees may act by majority vote of the voting members present at a meeting.
Each of such committees shall have and may exercise such of the powers of the
Board of Directors in the
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management of the business and affairs of the Corporation as may be provided in
these Bylaws or by resolution of the Board of Directors. Each of such committees
may authorize the seal of the Corporation to be affixed to any document or
instrument. The Board of Directors may designate one or more directors as
alternate members of any such committee, who may replace any absent or
disqualified member at any meeting of such committee. Meetings of committees may
be called by any member of the committee by written, telegraphic or telephonic
notice to all members of the committee and the Chief Executive Officer and shall
be at such time and place as shall be stated in the notice of such meeting. Any
member of a committee may participate in any meeting by means of conference
telephone or similar communications equipment. In the absence or
disqualification of a member of any committee the chairman of such committee
may, if deemed advisable, appoint another member of the Board of Directors to
act at the meeting in the place of the disqualified or absent member. The
chairman of the committee may fix such other rules and procedures governing
conduct of meetings as he shall deem appropriate.
Section 2. Executive Committee. The Board of Directors, by resolution
adopted by a majority of the whole Board of Directors, may designate two or more
directors to constitute an Executive Committee, which committee, to the extent
provided in such resolution, will have and may exercise all of the authority of
the Board of Directors in the business and affairs of the Corporation, and may
have power to authorize the seal of the Corporation to be affixed to all papers
which may require it, except where action by the Board of Directors is specified
by law.
Section 3. Audit Committee. The Audit Committee shall consist of not less
than two members of the Board of Directors. The Audit Committee shall be
responsible for recommending to the entire Board of Directors engagement and
discharge of independent auditors of the financial statements of the
Corporation, shall review the professional service provided by the independent
auditors, shall review the independence of independent auditors, shall review
with the auditors the plan and results of the auditing engagement, shall
consider the range of audit and non-audit fees, shall review the adequacy of the
Corporation's system of internal audit controls, shall review the results of
procedures for internal auditing and shall consult with the internal auditor of
the Corporation with respect to all aspects of the Corporation's internal
auditing program. In addition, the Audit Committee shall direct and supervise
special investigations as deemed necessary by the Audit Committee.
Section 4. Compensation Committee. The Compensation Committee shall
consist of not less than two members of the Board of Directors. The
Compensation Committee shall recommend to the Board of Directors the
compensation to be paid to officers and key employees of the Corporation and the
compensation of the Board of Directors. Except as otherwise provided in any
specific plan adopted by the Board of Directors, the Compensation Committee
shall be responsible for administration of executive compensation plans, stock
option plans and other forms of direct or indirect compensation of officers and
key employees, and each member of the Compensation Committee shall have the
power and authority to execute and bind the Corporation to such documents,
agreements and instruments related to such plans and compensation as are
approved by the Compensation Committee. In the alternative, the Compensation
Committee may authorize any officer of the Corporation to execute such
documents, agreements and instruments on behalf of the
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Corporation. In addition, the Compensation Committee shall review levels of
pension benefits and insurance programs for officers and key employees.
Section 5. Other Committees. The Board of Directors may similarly create
other committees for such terms and with such powers and duties as the Board of
Directors deems appropriate except as provided to the contrary by law, the
Articles of Incorporation, or these Bylaws.
Section 6. Advisory Directors. The Board of Directors may, by majority
vote, appoint one or more advisory directors. Advisory directors shall serve at
the Board of Directors' convenience solely to advise the Board of Directors, and
shall have no formal responsibilities. No advisory director shall be entitled
to vote at meetings of the Board of Directors, nor shall any advisory director
be counted when determining whether there is a quorum at meetings of the Board
of Directors. Advisory directors shall not be, by virtue of their position as
advisory directors, agents of the Corporation, and they shall not have the power
to bind the Corporation.
Section 7. Minutes. Each committee shall cause minutes of its proceedings
to be prepared and shall report the same to the board of directors upon the
request of the board of directors. The minutes of the proceedings of each
committee shall be delivered to the Secretary of the Corporation for placement
in the minute books of the Corporation.
Section 8. Compensation. Committee members may, by resolution of the
board of directors, be allowed a fixed sum and expenses of attendance, if any,
for attending any committee meetings or a stated salary.
Section 9. Responsibility. The designation of any committee and the
delegation of authority to it shall not operate to relieve the board of
directors or any director of any responsibility imposed upon it or such director
by law.
ARTICLE VI
NOTICES
Section 1. Methods of Notice. Whenever any notice is required to be given
to any shareholder or director under the provisions of any law, the Articles of
Incorporation or these Bylaws, it will not be construed to require personal
notice, but such notice may be given in writing by mail addressed to such
shareholder or director at such address as appears on the books of the
Corporation, and such notice shall be deemed to be given at the time when the
same shall be deposited in the United States mail with postage thereon prepaid.
Notice to directors may also be given by telegram, by facsimile, by telephone or
in person, and notice given by such means shall be deemed given at the time it
is delivered.
Section 2. Waiver of Notice. Whenever any notice is required to be given
to any shareholder or director under the provisions of any law, the Articles of
Incorporation or these Bylaws, a waiver thereof in writing signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, will be deemed equivalent to the giving of such notice.
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Attendance at any meeting will constitute a waiver of notice thereof except as
otherwise provided by law.
ARTICLE VII
OFFICERS
Section 1. Executive Officers. The officers of the Corporation will
consist of President, Vice President, Treasurer, and Secretary, each of whom
shall be elected by the Board of Directors. The Board of Directors may also
elect a Chairman of the Board, a Chief Executive Officer, additional vice
presidents, and one or more assistant secretaries and assistant treasurers. Any
two or more offices may be held by the same person.
Section 2. Election and Qualification. The Board of Directors at its
first meeting after each annual meeting of shareholders will elect the
President, one or more Vice Presidents, a Secretary and a Treasurer, none of
whom need be a member of the Board of Directors.
Section 3. Other Officers and Agents. The Board of Directors may elect or
appoint such other officers, assistant officers and agents as it deems
necessary, who will hold their offices for such terms and shall exercise such
powers and perform such duties as determined from time to time by the Board of
Directors.
Section 4. Salaries. The salaries of all officers of the Corporation will
be fixed by the Board of Directors except as otherwise directed by the Board of
Directors.
Section 5. Term, Removal and Vacancies. The officers of the Corporation
will hold office until their resignation or their successors are chosen and
qualify. Any officer, agent or member of the Executive Committee elected or
appointed by the Board of Directors may be removed at any time by the Board of
Directors; provided, however, that such removal shall be without prejudice to
the contract rights, if any, of such removed party. If any such office becomes
vacant for any reason, the vacancy will be filled by the Board of Directors.
Section 6. Chairman of the Board. The Chairman of the Board, if one is
elected, shall preside at meetings of the Board of Directors and shareholders
and shall have such other powers and duties as may from time to time be
prescribed by duly adopted resolutions of the Board of Directors.
Section 7. Chief Executive Officer. The Chief Executive Officer, if one
is elected, shall preside at meetings of the Board of Directors and shareholders
if there is no Chairman of the Board, and shall supervise and have overall
responsibility for the business, administration and operations of the
Corporation. In general, he shall perform all duties as from time to time may
be assigned to him by the Board of Directors. He shall from time to time make
such reports of the affairs of the Corporation as the Board of Directors may
require.
Section 8. President. The President shall, subject to the Board of
Directors, have general executive charge, management and control of the
properties and operations of the Corporation in the ordinary course of its
business with all such powers with respect to such responsibilities including
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the powers of general manager; and the president shall see that all orders and
resolutions of the Board of Directors are carried into effect. The president
shall have such other powers and duties as may from time to time be prescribed
by duly adopted resolution of the Board of Directors.
Section 9. Vice President. The Vice Presidents in the order determined by
the Board of Directors will, in the absence or disability of the President,
perform the duties and exercise the powers of the President, and will perform
such other duties as the Board of Directors and President may prescribe.
Section 10. Secretary. The Secretary will attend all meetings of the
Board of Directors and all meetings of the shareholders and record all votes and
the minutes of all proceedings in a book to be kept for that purpose and will
perform like duties for the standing committees when required. He will give, or
cause to be given, notice of all meetings of the shareholders and special
meetings of the Board of Directors, and will perform such other duties as may be
prescribed by the Board of Directors and President. He will keep in safe
custody the seal of the Corporation and, when authorized by the Board of
Directors, affix the same to any instrument requiring it, and when so affixed it
shall be attested by his signature or by the signature of an assistant
secretary.
Section 11. Assistant Secretaries. The assistant secretaries in the order
determined by the Board of Directors will perform, in the absence or disability
of the Secretary, the duties and exercise the powers of the Secretary and will
perform such other duties as the Board of Directors and President may prescribe.
Section 12. Treasurer. The Treasurer will have the custody of the
corporate funds and securities and will keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and will
deposit all monies and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. He will disburse the funds of the Corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and will
render to the Board of Directors and President, whenever they may require it, an
account of all of his transactions as Treasurer and of the financial condition
of the Corporation.
Section 13. Assistant Treasurers. The Assistant Treasurers in the order
determined by the Board of Directors, in the absence or disability of the
Treasurer, perform the duties and exercise the powers of the Treasurer and will
perform such other duties as the Board of Directors and President may prescribe.
ARTICLE VIII
SHARES AND SHAREHOLDERS
Section 1. Certificates Representing Shares. The certificates
representing shares of capital stock of the Corporation will be numbered and
entered in the books of the Corporation as they are issued. They will exhibit
the holder's name and number of shares and will be signed by the Chief Executive
Officer, President or Vice-President and the Secretary or an Assistant
Secretary. The signature of any such officer may be facsimile if the
certificate is countersigned by a transfer agent
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or registered by a registrar, other than the Corporation itself or an employee
of the Corporation. In case any officer who has signed or whose facsimile
signature has been placed upon such certificate has ceased to be such officer
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer at the date of its issuance.
Section 2. Transfer of Shares. Upon surrender to the Corporation of a
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it will be the duty of the
Corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books. Notwithstanding
the foregoing, no transfer will be recognized by the Corporation if such
transfer would violate federal or state securities laws, the Articles of
Incorporation, or any shareholders' agreements which may be in effect at the
time of the purported transfer. The Corporation may, prior to any such
transfer, require an opinion of counsel to the effect that any such transfer
does not violate applicable securities laws requiring registration or an
exemption from registration prior to any such transfer.
Section 3. Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other proper purpose, the
Board of Directors may provide that the stock transfer books be closed for a
stated period but not to exceed, in any case, sixty days. If the stock transfer
books are closed for the purpose of determining shareholders entitled to notice
of or to vote at a meeting of shareholders, such books must be closed for at
least ten days immediately preceding such meeting. In lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date as the record
date for any such determination of shareholders, such date, in any case, to be
not more than sixty days and, in case of a meeting of shareholders, not less
than ten days prior to the date on which the particular action requiring such
determination of shareholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, will be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as herein
provided, such determination will apply to any adjournment thereof except where
the determination has been made through the closing of stock transfer books and
the stated period of closing has expired.
Section 4. Registered Shareholders. The Corporation is entitled to
recognize the exclusive right of a person registered on its books as the owner
of the share to receive dividends, and to vote as such owner, and for all other
purposes as such owner; and the Corporation is not bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it has express or other notice thereof, except
as otherwise provided by the laws of Texas.
Section 5. Lost Certificate. The Board of Directors may direct a new
certificate or certificate to be issued in place of any certificate or
certificate theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person
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claiming the certificate to be lost or destroyed. When authorizing such issue of
a new certificate or certificate, the Board of Directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificate, or his legal representatives, to
advertise the same in such manner as it shall require and/or give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate alleged
to have been lost or destroyed.
ARTICLE IX
GENERAL
Section 1. Dividends. The Board of Directors may from time to time
declare, and the Corporation pay, dividends on its outstanding shares of capital
stock in cash, in property, or in its own shares, except when the declaration or
payment thereof would be contrary to law, the Articles of Incorporation or these
Bylaws. Such dividends may be declared at any regular or special meeting of the
Board of Directors, and the declaration and payment will be subject to all
applicable provisions of law, the Articles of Incorporation and these Bylaws.
Section 2. Reserves. Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the Board of Directors from time to time, in its absolute discretion,
deems proper as a reserve fund to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose as the Board of Directors may determine to be in the
interest of the Corporation, and the Board of Directors may modify or abolish
any such reserve in the manner in which it was created.
Section 3. Directors' Annual Statement. The Board of Directors will
present at each annual meeting and when called for by vote of the shareholders
at any special meeting of the shareholders, a full and clear statement of the
business and condition of the Corporation.
Section 4. Checks. All checks or demands for money and notes of the
Corporation will be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Section 5. Corporate Records. The Corporation will keep at its registered
office or principal place of business, or at the office of its transfer agent or
registrar, a record of its shareholders giving the names and addresses of all
shareholders and the number and class of shares held by each. All other books
and records of the Corporation may be kept at such place or places within or
without the State of Texas as the Board of Directors may from time to time
determine.
Section 6. Seal. The corporate seal will have inscribed thereon the name
of the Corporation. The seal may be used by causing it or a facsimile thereof
to be impressed, affixed or reproduced.
Section 7. Amendment. The Board of Directors shall have the exclusive
power to make, alter, amend and repeal the Bylaws. Any Bylaws made by the Board
of Directors under the powers conferred hereby may not be altered, amended or
repealed by the shareholders.
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Section 8. Indemnification. Each director, officer and former director or
officer of the Corporation, and any person who may have served or who may
hereafter serve at the request of the Corporation as a director or officer of
another corporation in which it owns shares of capital stock or of which it is a
creditor, is hereby indemnified by the Corporation against expenses actually and
necessarily incurred by him in connection with the defense of any action, suit
or proceeding in which he is made a party by reason of being or having been such
director or officer, except in relation to matters as to which he shall be
adjudged in such action, suit or proceeding to be liable for negligence or
misconduct in the performance of duty. Such indemnification will not be deemed
exclusive of any other rights to which such director, officer or other person
may be entitled under any agreement, vote of shareholders, or otherwise.
Without limitation, nothing in this section shall limit any indemnification
provisions in the Articles of Incorporation.
Section 9. Election Not to be Governed by Part Thirteen of the TBCA. The
Corporation expressly elects not to be governed by the provisions of Part
Thirteen of the TBCA.
I, the undersigned Secretary of Midcoast Energy Resources, Inc. hereby
certify that the foregoing is a true and correct copy of the Bylaws of said
Corporation, adopted by the written consent of the Board of Directors of the
Corporation on the 22nd day of September, 1999.
By: /s/ Duane S. Herbst
---------------------------------
Duane S. Herbst, Secretary
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