<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
THE MERIDIAN RESOURCE CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
N/A
2) Aggregate number of securities to which transaction applies:
N/A
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
N/A
4) Proposed maximum aggregate value of transaction:
N/A
(5) Total fee paid:
N/A
[ ] Fee paid previously with preliminary materials.
<PAGE> 2
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
N/A
2) Form, Schedule or Registration Statement No.:
N/A
3) Filing Party:
N/A
4) Date Filed:
N/A
<PAGE> 3
THE MERIDIAN RESOURCE CORPORATION
1401 ENCLAVE PARKWAY, SUITE 300
HOUSTON, TEXAS 77077
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF THE MERIDIAN RESOURCE CORPORATION:
The 2000 Annual Meeting of Shareholders of The Meridian Resource
Corporation (the "Company") will be held on June 27, 2000, at 10:00 a.m. Houston
time, at The West Lake Club, 510 West Lake Park Boulevard, Houston, Texas, for
the following purposes:
1. To elect two persons to serve as Class I Directors on the
Company's Board of Directors, to hold office until the 2003 Annual
Meeting of Shareholders or until such person's successor shall be duly
elected and qualified; and
2. To transact such other business as may properly come before
the meeting.
The Board of Directors has fixed the close of business on May 23, 2000,
as the record date for determination of shareholders who are entitled to notice
of and to vote either in person or by proxy at the 2000 Annual Meeting of
Shareholders and any adjournment thereof.
All shareholders are cordially invited to attend the meeting in person.
Even if you plan to attend the meeting, YOU ARE REQUESTED TO SIGN, DATE AND
RETURN THE ACCOMPANYING PROXY AS SOON AS POSSIBLE.
Each shareholder of the Company has previously received a copy of the
Company's 1999 Annual Report to Shareholders (the "Annual Report") or is
receiving a copy of the Annual Report with this Proxy Statement. If a
shareholder did not receive a copy of the Annual Report, such shareholder should
contact P. Richard Gessinger at the Company at (281) 558-8080 and the Company
will send a copy of the Annual Report to such shareholder free of charge.
By Order of the Board of Directors
Joseph A. Reeves, Jr.
Chairman of the Board and
Chief Executive Officer
May 1, 2000
<PAGE> 4
THE MERIDIAN RESOURCE CORPORATION
1401 ENCLAVE PARKWAY, SUITE 300
HOUSTON, TEXAS 77077
------------------
PROXY STATEMENT
------------------
GENERAL INFORMATION
This Proxy Statement and the accompanying proxy card are furnished in
connection with the solicitation of proxies by order of the Board of Directors
of The Meridian Resource Corporation (the "Company") to be voted at the 2000
Annual Meeting of Shareholders (the "Meeting"), to be held at the time and place
and for the purposes set forth in the accompanying notice. Such notice, this
Proxy Statement and the form of Proxy are being mailed to shareholders on or
about May 26, 2000.
The Company will bear the costs of soliciting proxies in the
accompanying form. In addition to the solicitation made hereby, proxies also may
be solicited by telephone, telegram or personal interview by officers and
regular employees of the Company. The Company will reimburse brokers or other
persons holding stock in their names or in the names of their nominees for their
reasonable expenses in forwarding proxy material to beneficial owners of stock.
All duly executed proxies received prior to the Meeting will be voted
in accordance with the choices specified thereon, unless revoked in the manner
provided hereinafter. As to any matter for which no choice has been specified in
a proxy, the shares represented thereby will be voted by the persons named in
the proxy (i) "for" the election as director of the nominees listed herein and
(ii) in the discretion of such persons, in connection with any other business
that may properly come before the Meeting. A Shareholder who has executed and
returned a proxy may revoke it at any time prior to the exercise thereof by
written notice to the Secretary of the Company at the above address of the
Company or by the execution and delivery of a later dated proxy, or by
attendance at the Meeting and voting their shares in person.
As of the close of business on May 23, 2000, the record date ("Record
Date") for determining shareholders entitled to vote at the Meeting, the Company
had outstanding and entitled to vote 46,613,147 shares of Common Stock, $.01 par
value ("Common Stock"), entitled to one vote per share and 3,982,906 shares of
Preferred Stock, $1.00 par value ("Preferred Stock" and, together with the
Common Stock, "Voting Stock"), entitled to one vote per share. The outstanding
shares of Common Stock and Preferred Stock are the only shares of capital stock
of the Company entitled to vote.
The holders of a majority of the outstanding shares of Voting Stock as
of the Record Date, whether represented in person or by proxy, will constitute a
quorum for the transaction of business
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at the Meeting as to any matter for which all of the Common Stock is entitled to
vote. The holders of a majority of the shares of Preferred Stock as of the
Record Date, whether represented in person or proxy, will constitute a quorum
for the transaction of business at the Meeting on matters for which the
Preferred Stock is entitled to vote as a single class, including the election of
a Preferred Director at the Meeting. The Certificate of Designation for the
Preferred Stock (the "Certificate of Designation") provides that the Preferred
Stock is entitled to vote with the Common Stock on all matters for which a vote
of the holders of Common Stock is taken, including the matters to be voted on at
the Meeting. The Certificate of Designation further provides that the Preferred
Stock is entitled to elect that number of directors (each a "Preferred
Director") that equals the product (rounded downward to the nearest whole
number, but in no event less than one) of the total number of directors
following such election multiplied by 20%, and also provides that the Preferred
Stock is entitled to a class vote on (i) the authorization, creation or
issuance, or any increase in the authorized shares of a class of capital stock
that is senior to or on parity with the Preferred Stock and (ii) the amendment,
modification, alteration or repeal of any of the provisions of the Certificate
of Designation.
As of the record date, Shell Louisiana Onshore Properties Inc.
("SLOPI"), a subsidiary of Shell Oil Company, owned 12,082,030 shares of Common
Stock and all of the outstanding Preferred Stock (collectively, the "Shell
Shares"), which represented 32% of the outstanding Voting Stock as of the Record
Date. See "Certain Relationships and Related Transactions - Shell Transaction -
Stock Rights and Restrictions - Voting Rights" beginning on page 22 of this
Proxy Statement.
ELECTION OF CLASS I DIRECTORS
Two directors will be elected by the holders of the Common Stock and
Preferred Stock at the Meeting to serve as the Class I Directors of the
Company's Board of Directors until the 2003 Annual Meeting of Shareholders or
until such person's successor shall be duly elected. The Board of Directors
recommends the election of James T. Bond and Jack A. Prizzi as the Class I
Directors. Messrs. Bond and Prizzi are each currently directors of the Company.
Unless contrary instructions are set forth in the proxies, it is intended that
each person executing a proxy will vote all shares represented by such proxy for
the election as director of each of Messrs. Bond and Prizzi. Should either of
Messrs. Bond or Prizzi become unable or unwilling to accept nomination or
election, it is intended that the person acting under the proxy will vote for
the election of such other person as the Board of Directors of the Company may
recommend. Management has no reason to believe that either of Messrs. Bond and
Prizzi will be unable or unwilling to serve if elected.
There are currently two Class I directorships up for election. With
respect to this election, proxies cannot be voted for other than such
directorships. A nominee for director receiving a plurality of votes cast at the
Meeting and entitled to be cast for such nominee will be elected as director.
Abstentions and broker non-votes will not be treated as a vote for or against a
particular director and will not affect the outcome of the election of
directors.
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DIRECTORS
The Company's Bylaws provide that the Board of Directors (other than
the Preferred Directors) shall be classified into three classes: Class I, Class
II and Class III Directors. In addition, pursuant to the terms and conditions of
the Certificate of Designation, the holders of the Preferred Stock are entitled
to elect that number of Preferred Directors that equals the product (rounded
downward to the nearest whole number, but in no event less than one) of the
total number of directors of the Company following such election multiplied by
20%. As the holder of all of the issued and outstanding Preferred Stock on the
Record Date and pursuant to the terms of the Certificate of Designation, Shell
Louisiana Onshore Properties Inc. ("SLOPI"), a subsidiary of Shell Oil Company
("Shell"), currently is entitled to elect one Preferred Director to the
Company's Board of Directors. SLOPI has elected J. H. Sheffield to serve as
Preferred Director.
Set forth below is certain information concerning the current directors
of the Company, including the nominees for election as Class I Director, with
each person's business experience for at least the past five years.
<TABLE>
<CAPTION>
PRESENT POSITIONS DIRECTOR EXPIRATION OF
NAME AGE WITH THE COMPANY SINCE PRESENT TERM
- -------------------------- --- ----------------------------- ------------- -------------
<S> <C> <C> <C> <C>
James T. Bond 75 Class I Director 1997 2000
Jack A. Prizzi 65 Class I Director 1993 2000
E. L. Henry 64 Class II Director 1998 2001
Joe E. Kares 56 Class II Director 1990 2001
Gary A. Messersmith 51 Class II Director 1997 2001
Michael J. Mayell 53 Class III Director and 1990 2002
President
Joseph A. Reeves, Jr. 53 Class III Director, 1990 2002
Chairman of the
Board and Chief
Executive Officer
J. H. Sheffield 55 Preferred Director 2000 --
</TABLE>
- ------------
James T. Bond is General Manager of H.L. Hawkins, Jr. Oil and Gas
located in Houston and New Orleans, Louisiana. He has been associated with such
company for over fifty years.
Jack A. Prizzi has served as Managing Director of Jack A. Prizzi and
Co., an investment and financial advisory firm in New York, New York, since
December 1988.
E. L. Henry has been a partner with the law firm of Adams and Reese
L.L.P. in Baton Rouge, Louisiana since 1987. Mr. Henry was formerly Commissioner
of the Division of Administration for
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the State of Louisiana from 1980 through 1984, a member of the Louisiana House
of Representatives from 1968 through 1980 and Speaker of the Louisiana House of
Representatives from 1972 through 1980.
Joe E. Kares has been a partner with the public accounting firm of
Kares & Cihlar in Houston, Texas since 1980.
Gary A. Messersmith has been a partner with the law firm of Fouts &
Moore, L.L.P. in Houston, Texas since 1982.
Michael J. Mayell is President of the Company. Prior to assuming such
position with the Company, Mr. Mayell held a similar position with TMR from 1988
to 1990.
Joseph A. Reeves, Jr. is Chairman of the Board and Chief Executive
Officer of the Company. Prior to assuming his positions with the Company, Mr.
Reeves held similar positions with the Company's predecessor, Texas Meridian
Resources, Ltd. ("TMR"), from 1988 until 1990.
J. H. Sheffield is Manager - Joint Ventures of Shell Exploration and
Production Company and has been employed by Shell Oil Company or its affiliates
for the past 31 years.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors held nine meetings during the year ended
December 31, 1999. In 1999, each director attended at least 80% of the total
combined number of meetings held by the Board and by the committees on which
each director served.
The Board of Directors has an Executive Committee, an Audit Committee,
an Executive Compensation Committee, a Directors' Stock Plan Administration
Committee and an Employee Compensation Committee. The Company does not have a
nominating or other similar committee.
The Executive Committee is currently comprised of Messrs. Reeves and
Mayell and is responsible for assisting with the general management of the
business and affairs of the Company during intervals between meetings of the
Board of Directors. Twelve meetings of the Executive Committee were held in
1999.
The Audit Committee is currently comprised of Messrs. Kares, Bond and
Sheffield and is charged with the duties of recommending the appointment of the
independent certified public accountants, reviewing their fees, ensuring that
proper guidelines are established for the dissemination of financial
information, meeting periodically with the independent auditors, the Board of
Directors and certain officers of the Company and its subsidiaries to ensure the
adequacy of internal controls and reporting, reviewing consolidated financial
statements and performing any other duties or functions deemed appropriate by
the Board of Directors. All members of the Audit Committee are non-employee
directors. One Audit Committee meeting was held in 1999. Pursuant to the terms
and conditions of the Certificate of Designation, at least one Preferred
Director shall be a member of the Audit Committee.
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<PAGE> 8
The Executive Compensation Committee (the "Executive Compensation
Committee") is currently comprised of Messrs. Kares, Messersmith and Prizzi, all
of whom are non-employee directors of the Company. The Executive Compensation
Committee is generally responsible for determining the cash compensation to be
paid to each of Messrs. Reeves and Mayell; however, during 1999, compensation
decisions with respect to Messrs. Reeves and Mayell were made by the full Board
of Directors, with Messrs. Reeves and Mayell abstaining. One Executive
Compensation Committee meeting was held for the year of 1999.
The Directors' Stock Plan Administration Committee is currently
comprised of Messrs. Reeves and Mayell and is responsible for administering the
Company's Non-Employee Director Stock Option Plan. Two Directors' Stock Plan
Administration Committee meetings were held in 1999.
The Employee Compensation Committee is currently comprised of Messrs.
Reeves and Mayell. The Employee Compensation Committee sets the salaries of all
employees, including the elected officers and other senior executives, other
than their own salaries (which are set by the Executive Compensation Committee
or the full Board of Directors), and grants bonuses to such elected officers and
other senior executives. Seven Employee Compensation Committee meetings were
held in 1999.
COMPENSATION OF DIRECTORS
Non-employee directors of the Company receive an annual retainer,
payable in quarterly installments, of $20,000. Non-employee directors also are
reimbursed for expenses incurred in attending Board of Directors and committee
meetings, including those for travel, food and lodging. Directors and members of
committees of the Board of Directors who are employees of the Company or its
affiliates are not compensated for their Board of Directors and committee
activities.
The Company has a Non-Employee Director Stock Option Plan (the
"Director Stock Option Plan") pursuant to which options to purchase up to
570,000 shares of Common Stock may be granted. Under the Director Stock Option
Plan, each non-employee director (other than a Preferred Director) is granted,
on the date of his appointment, election, reappointment or re-election as a
member of the Board of Directors, an option ("Director Option") to purchase
15,000 shares of Common Stock at an exercise price per share equal to the fair
market value of a share of Common Stock on the date of grant. Preferred
Directors are granted options to purchase 15,000 shares of Common Stock upon
initial appointment and upon such director's third successive re-election. The
duration of each Director Option is five years from the date of grant, and each
Director Option may be exercised in whole or in part at any time after the date
of grant; provided, however, that the option vests with respect to 25% of the
shares of Common Stock covered by such Director Option one year after the date
of grant, with respect to an additional 25% of such shares of Common Stock two
years after the date of grant, and with respect to the remaining shares of
Common Stock three years after the date of grant. There are currently
outstanding options to acquire 150,000 shares under the Director Stock Option
Plan with a weighted average exercise price of $8.73 per share. There are
currently 360,000 additional shares available for grant under the Director Stock
Option Plan.
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<PAGE> 9
Mr. Messersmith also receives a retainer of $8,330 per month for legal
services he renders on behalf of the Company and also participates in the
Company's well bonus plans pursuant to which he was paid approximately $46,000
and received 19,000 shares of the Company's common stock during 1999.
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<PAGE> 10
REPORT ON EXECUTIVE COMPENSATION
GENERAL POLICY
The Company's executive compensation program is designed to attract,
motivate and retain talented management personnel and to reward management for
successfully performing their duties and improving shareholder value.
Compensation and incentives are provided through the combination of cash
salaries and bonuses, stock option and other stock-based awards, and grants of
net profit interests in the Company's drilling prospects. The Company's overall
compensation package is intended to provide the Company's executive officers
with above average compensation for above average results and performance, with
an emphasis on compensation that rewards the executive for actions that have
demonstrably benefitted the long-term interests of the Company. Decisions with
respect to compensation for any particular executive officer or employee are
based on a number of subjective factors, including the individual's performance
and contribution to the future growth of the Company, the financial and
operational results of the Company and industry and market conditions and the
need to insure the continued employment of individuals that the Board believes
are key to the long-term prospects of the Company.
Decisions with respect to the cash compensation of the Company's
executive officers were made in a bifurcated manner during 1999. The Employee
Compensation Committee of the Board of Directors, which is comprised of Messrs.
Reeves and Mayell set the salaries of all employees (except for themselves),
including elected officers and other senior executives, and granted cash bonuses
to such elected officers and other senior executives. Cash compensation
decisions with respect to Messrs. Reeves and Mayell were approved by the Board
of Directors, with Messrs. Reeves and Mayell abstaining. Decisions with respect
to the granting of stock-based awards and the payment of other non-cash
compensation for all of the Company's executive officers, including Messrs.
Reeves and Mayell, were made by the full Board of Directors, with each of
Messrs. Reeves and Mayell abstaining with respect to matters pertaining to them.
The components of the Company's executive compensation program are more
specifically summarized below.
Base Salary.
The base salaries of the Company's employees are determined based on
their positions with the Company, their talents and experience and competitive
market factors, including the desire by the Company to attract and retain
executives with expertise and proven success in 3-D seismic exploration.
Generally, base salaries are received in cash, however, the Company adopted a
deferred compensation program in 1996 that allows the Company's Chief Executive
Officer, President and other officers to receive payment of their salaries in
deferred stock rights in lieu of cash compensation. The purpose of this deferred
compensation program is to preserve company liquidity and further align the
executive officers' interests with those of the Company's shareholders. Stock
cannot be issued under such deferred compensation arrangements until the death,
retirement or termination of the executive officer, and until such issuance, the
value of such stock rights are
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subject to the general credit of the Company and changes in market value for the
Company's Common Stock.
In reviewing the base salaries of the Company's executive officers, the
Company considers data from published reports regarding compensation of
executive officers from a cross section of other energy companies, which may or
may not include companies represented in the peer group used in completing the
Company's performance graph. These reports are used as a check on the general
competitiveness of the Company's salaries and not as a means to mathematically
establish salaries within specified percentiles of salary ranges.
Bonus Compensation.
Bonus compensation is provided to the Company's executive officers and
other employees from time to time based on the financial results of the Company
and various subjective factors, including the executive's or employee's
contribution to the Company's success in finding reserves and acquiring
prospects, identifying and obtaining sources of capital for the Company and
increasing shareholder value. A Christmas bonus of up to one month's base salary
was awarded and paid during 1999 to the Company's employees.
Net Profit Interests.
The Company believes that the granting of participation interests in
the Company's prospects to its employees promotes in them a proprietary interest
in the Company's exploration efforts that benefits the Company and its
shareholders. To achieve this objective, the Company grants an interest (either
in the form of a bonus or real property right, depending on the level of the
employee) in the net profits received from all wells drilled to all of its
employees, including its executive officers. Each employee's level of
participation in these well bonus plans is based on various factors, including
the employee's tenure, salary level, job classification and contribution to the
Company's long-term prospects.
Long-Term Incentive Compensation.
The Board of Directors believes that long-term incentive compensation
is an important component of the Company's compensation program and that the
value of long-term incentive compensation should be directly related to
increases in shareholder value. Thus, as part of total compensation, the Company
provides long-term incentive compensation to its executive officers through
stock options under the Company's stock option plans.
Under the Company's existing stock option plans (collectively, the
"Incentive Plans"), the Board of Directors has the authority to grant to the
Company's executive officers and key employees options to purchase shares of
Common Stock for terms of up to ten years, with vesting conditions established
by the Board of Directors, and other forms of stock-based compensation including
restricted stock. Awards under the Incentive Plans are intended to provide
incentives to the participants to increase shareholder value by providing
benefits that are directly related to the market value of the Common Stock. The
Board of Directors believes that stock-based compensation
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provides a desirable form of incentive to the Company's executive officers in
that stock-based compensation received by an executive officer generally will be
of no value to the officer unless the value of the Common Stock increases.
If a stock option or other stock-based award is granted to an executive
officer, the number of shares of Common Stock subject to the granted option or
award will be based on, among other things, the level of responsibility of the
executive officer and the anticipated contribution of the officer to the future
growth of the Company. The Board of Directors also considers the amount and
terms of the options and other stock-based benefits held by the executive
officers.
DISCUSSION OF COMPENSATION OF THE CHIEF EXECUTIVE OFFICER AND PRESIDENT
During 1998, the Board of Directors (other than Messrs. Reeves and
Mayell) performed an overall review and evaluation of the compensation levels of
each of Messrs. Reeves and Mayell. The need for such review by the full Board of
Directors was based upon the significant changes in the breadth and scope of the
Company's operations that resulted from the Company's recent exploration and
development activities and other endeavors, including the Company's recent
acquisition of substantially all of Shell's south Louisiana oil and gas property
interests and the Company's efforts in developing these properties and other
properties acquired by the Company. As a part of this process, the Board of
Directors engaged Arthur Anderson & Company ("Arthur Andersen") to review the
compensation structure for each of Messrs. Reeves and Mayell and other employees
of the Company and provide to the Board of Directors executive compensation data
for other independent oil and gas companies (which included a cross-section of
energy companies plus some of the companies in the Company's Peer Group utilized
in creating the stock performance graph contained on page 18 of this Proxy
Statement) that the Board of Directors could utilize for comparative purposes.
Based in part upon the Board of Directors assessment of the data provided by
Arthur Andersen, as well as other subjective factors, including the need to
insure the continued employment of Messrs. Reeves and Mayell and the Board of
Director's assessment of Messrs. Reeves' and Mayell's roles in strategically
positioning the Company for future growth, in particular, the fact that their
efforts were instrumental in the successful integration of the operations
acquired in the Cairn acquisition and in the identification, negotiation and
successful completion of the Company's acquisition of substantially all of
Shell's south Louisiana properties, the Board of Directors granted to each of
Messrs. Reeves and Mayell options to purchase 1,500,000 shares of Common Stock,
which vest over three years, and approved cash bonus payments of $300,000 per
year that are tied to the continued employment of the executive officer with the
Company. No increases were made to Messrs. Reeves' or Mayell's annual salaries
during 1998, except for cost of living increases.
No increases were made to Messrs. Reeves' or Mayell's annual salaries during
1999, except for cost of living increases. The bonus payments were paid on
January 1 of 1999 and 2000, and will be paid in 2001 so long as the executive
officer is employed by the Company on such date. The Board of Directors believes
that the granting of these stock options and the approval of these bonus
payments further aligns Messrs. Reeves and Mayell's interests with those of the
Company and further insures their continued employment with the Company and
rewards them for their efforts that were instrumental to the future prospects of
the Company.
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RECENT TAX LEGISLATION
Section 162(m) ("Section 162(m)") of the Internal Revenue Code of 1986,
as amended, currently imposes a $1 million limitation on the deductibility of
certain compensation paid to the Company's five highest paid executive officers.
Excluded from the limitation is compensation that is "performance based".
Excluded compensation must meet certain criteria, including being based upon
predetermined objective standards approved by the Company's shareholders. Awards
under the Incentive Plans as well as bonus and salary compensation awarded to
the Company's executive officers do not currently satisfy the requirements of
Section 162(m); however, since the Company currently does not expect to be
paying federal income taxes in the near future, the Board of Directors and
Executive Compensation Committee do not believe that such non-deductibility will
have a material effect on the Company. The Board of Directors intend to take
into account the potential application of Section 162(m) with respect to
incentive compensation awards and other compensation decisions made by them in
the future.
Joseph A. Reeves, Jr. Michael J. Mayell
James T. Bond E. L. Henry
Joe E. Kares Gary A. Messersmith
Jack A. Prizzi J. H. Sheffield*
* Mr. Sheffield was not a member of the Board of Directors during 1999.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
As discussed above, certain components of the compensation of the
executive officers of the Company, other than Messrs. Reeves and Mayell, are
determined by the Employee Compensation Committee of the Board of Directors of
the Company, which is comprised of Messrs. Reeves and Mayell. Stock-based and
other non-cash compensation decisions with respect to the Company's executive
officers are made by the full Board of Directors, with each of Messrs. Reeves
and Mayell abstaining with respect to matters pertaining to him. For a
discussion of certain transactions between the Company and members of the Board
of Directors, see "Certain Relationships and Related Transactions" beginning on
page 21 of this Proxy Statement. In addition, cash compensation decisions during
1999 with respect to Messrs. Reeves and Mayell were made by the full Board of
Directors, with each of Messrs. Reeves and Mayell abstaining.
COMPENSATION
EXECUTIVE COMPENSATION
The following tables contain compensation data for the five highest
paid executive officers serving at the end of 1999 whose 1999 salary and annual
bonus compensation exceeded $100,000, and other individuals who would otherwise
have been included in this table but for the fact that such
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individuals were not serving as executive officers of the Company at the end of
1999 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------------------------------------- --------------------------
Restricted Securities
Name and Other Annual Stock Underlying All Other
Principal Position Year Salary($)(1) Bonus($)(1)(2) Compensation($)(3) Award($)(1) Options(#) Compensation($)(4)
- ----------------------- ---- ------------ -------------- ------------------ ------------ ----------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Joseph A. Reeves, Jr. 1999 $33,994 $927,468 $ - $800,000 - $10,000
CEO 1998 32,488 526,010 101,869 748,800 1,500,000 10,000
1997 37,454 344,920 48,300 800,000 50,000 9,575
Michael J. Mayell 1999 33,994 927,468 - 800,000 - 10,000
President 1998 32,488 526,010 101,869 748,800 1,500,000 10,000
1997 37,454 344,920 48,300 800,000 50,000 9,575
P. Richard Gessinger 1999 208,693 220,205 - - - 10,000
Executive Vice President 1998 200,000 24,353 - 58,379(6) 4,000 10,000
and Chief Financial 1997 16,667 8,333 - - 25,000 -
Officer(5)
Lloyd V. DeLano 1999 155,842 128,863 - - - 10,000
Vice President and 1998 149,350 47,602 - - 25,000 10,000
Chief Accounting Officer 1997 127,950 12,083 - - 7,500 8,677
James W. Carrington, Jr. 1999 154,742 118,094 - - - 10,000
VP Land--TMRX(7) 1998 121,347 14,570 - - 17,500 88,185
1997 - - - - - -
</TABLE>
- --------------
(1) Salary and bonus compensation excludes amounts deferred by Messrs.
Reeves and Mayell pursuant to a deferred compensation plan (the "DCP"),
which have been reported in the Restricted Stock Award column. The DCP
was approved by the Board of Directors in 1996 as a method to preserve
the Company's liquidity and further align the executive officers'
interests with those of the Company's shareholders. No actual shares of
Common Stock are issued and the officer has no rights with respect to
any shares unless and until there is a distribution. Distributions
cannot be made until the death, retirement or termination of employment
of the officer. Until distribution, the value of such stock rights are
subject to the general credit of the Company and the market value of
the Common Stock. Pursuant to the DCP, the Company also granted to each
officer an equal matching deferral, which is subject to a one-year
vesting and is included in the Restricted Stock Award column. Under the
terms of the grants, the employee and matching deferrals are allocated
to a Common Stock account in which units are credited to the accounts
of the officer based on the number of shares that could be purchased at
the market price of the Common Stock at June 28, 1996 ($9.00 per
share), for the deferrals of 1996; at December 31, 1996 ($17.00 per
share), for the deferrals of 1997; at December 31, 1997 ($9 9/16 per
share), for the deferrals during the first half of 1998; and at June
30, 1998 ($7 1/16 per share), for the deferrals during the second half
of 1998; at December 31, 1998 ($3 3/16 per share), for the deferrals
during the first half of 1999; and at June 30, 1999 ($3 7/8 per share),
for the deferrals during the second half of 1999. Pursuant to the DCP,
Messrs. Reeves and Mayell each elected to defer $400,000, $374,400 and
$400,000 of their compensation for 1997, 1998 and 1999, respectively.
As of December 31, 1999, each of Messrs. Reeves and Mayell had rights
to 407,006 shares (including matching deferrals) with a total value
(including matching deferrals) as of December 31, 1999 of $1,246,456.
An amount equal to the dividends, if any, that would have otherwise
been paid with respect to such shares had they actually been issued
will be credited to the respective Common Stock accounts as well.
(2) Bonus amounts in 1999 include $64,284, $64,284, $211,538, $122,391 and
$111,668 paid to each of Messrs. Reeves, Mayell, Gessinger, DeLano and
Carrington pursuant to the Company's Well Bonus Plans. See page 15 for
a discussion of the Well Bonus Plans.
-11-
<PAGE> 15
3) Includes the value conveyed during the applicable year attributable to
net profits interests assigned to the Named Executive Officer during
the applicable year and distributions received, if any, during the
applicable year attributable to net profits interests assigned to the
Named Executive Officers during the applicable year in connection with
the execution of certain employment agreements. In connection with such
employment agreements, the Company adopted in 1994 a program under
which net profits interests are granted to certain key employees of the
Company in prospects and wells that the Company is pursuing and
drilling. In general, the net profits interest is 2.00% of any well and
is subject to proportional reduction to the Company's interests.
Pursuant to these arrangements, during 1997 and 1998, net profits
interests of 2% were granted to each of Messrs. Reeves and Mayell in
various prospects acquired by the Company in 1997 and 1998. Although
such grants were intended to provide long-term incentive for the
executive officer or employee by aligning his or her interests with
those of the Company in its drilling efforts, such grants are not
subject to vesting, the continued employment of the individual with the
Company or other conditions. Accordingly, such grants are considered
part of the Company's annual compensation package and not compensation
under a long-term incentive plan. Each grant of a net profits interest
is reflected in this table at a value based on a third party appraisal
of the interest granted or the Company's current estimate of value for
those prospects for which a third party appraisal has not yet been
completed. Such values are appraisals or estimates only and the actual
realized value of such interests may prove to be higher or lower than
the amounts reflected in this table. See also "-Employment Agreements"
and "-Well Bonus Plans and NPI Rights" below.
(4) Includes Company contributions to its 401(k) plan. Also includes
reimbursement of 1998 moving expenses for Mr. Carrington.
(5) Mr. Gessinger began employment with the Company in November 1997.
(6) Reflects restricted stock grants pursuant to such employee's employment
agreement. Mr. Gessinger is fully vested in 13,876 shares, with the
remaining 4,439 vesting in one year. At December 31, 1999, the value of
such restricted stock grants was $56,090 for Mr. Gessinger.
(7) Mr. Carrington began employment with the Company in March 1998.
-12-
<PAGE> 16
The following table summarizes the number and value of options
exercised by the Named Executive Officers during 1999, as well as the number and
value of unexercised options owned by the Named Executive Officers as of
December 31, 1999. None of the options summarized in this table were
"in-the-money" as of December 31, 1999.
AGGREGATE OPTION EXERCISES IN FISCAL YEAR 1999
AND DECEMBER 31, 1999 OPTION VALUE
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised In-the-Money
Options at Options at
Shares December 31, December 31,
Acquired Value 1999(#) 1999($)
on Realized Exercisable/ Exercisable/
Name Exercise(#) ($) Unexercisable (1) Unexercisable
- ---------------------------- ----------- ------------- ---------------------- -----------------------
<S> <C> <C> <C> <C>
Joseph A. Reeves, Jr. (1) -- -- 1,031,000/750,000 0/0
Michael J. Mayell (1) -- -- 1,031,000/750,000 0/0
P. Richard Gessinger -- -- 20,750/8,250 0/0
Lloyd V. DeLano -- -- 67,500/2,500 0/0
James W. Carrington, Jr. -- -- 11,250/6,250 0/0
</TABLE>
- --------------------------------
(1) Excludes (i) the warrants (the "General Partner Warrants") granted to
each of Messrs. Reeves and Mayell in October 1990 in connection with
the Company's formation and (ii) warrants ("Executive Officer
Warrants") issued in prior years to Messrs. Reeves and Mayell in
connection with the surrender of certain "class B Warrants" to the
Company. The value of these warrants at December 31, 1999, based on the
difference between the market price of the Common Stock at December 31,
1999 and the exercise price of the respective warrants, was $1,345,356
for each of Messrs. Reeves and Mayell.
EMPLOYMENT AGREEMENTS
The Company has entered into an employment agreement ("Employment
Agreement") with each of Messrs. Reeves and Mayell. Each Employment Agreement is
for a term of three years, renewable annually for a term to extend three years
from such renewal date. Each Employment Agreement provides for compensation in a
minimum amount of $289,800 per annum, to be reviewed at least annually for
possible increases, and annual bonuses and other perquisites in accordance with
Company policy. If either of Messrs. Reeves or Mayell terminates his employment
for "Good Reason" (as defined below), or is terminated by the Company for other
than "Good Cause" (as defined below), such individual would receive a cash lump
sum payment equal to the sum of (i) the base salary for the remainder of the
employment period under the Employment Agreement, (ii) an amount equal to the
last annual bonus paid to him, (iii) two times the sum of his annual base salary
and last annual bonus, (iv) all compensation previously deferred and any accrued
interest thereon, (v) a lump-sum retirement benefit equal to the actuarial
equivalent of the benefits lost by virtue of the early termination of the
employee and (vi) continuation of benefits under the Company's benefit plans. If
either of Messrs. Reeves or Mayell dies or is terminated by the Company for Good
Cause, such individual or such individual's estate, as applicable, would receive
all payments then due him
-13-
<PAGE> 17
under the Employment Agreement through the date of termination, including a
prorated annual bonus and any compensation previously deferred. Each of Messrs.
Reeves and Mayell also is entitled under his Employment Agreement to certain
gross-up payments if an excise tax is imposed pursuant to Section 4999 of the
Internal Revenue Code, which imposes an excise tax on certain severance payments
in excess of three times an annualized compensation amount following certain
changes in control.
The term "Good Reason" is defined in each Employment Agreement, with
respect to each of Messrs. Reeves and Mayell, generally to mean (i) a change in
the nature or scope of the duties or responsibilities of such individual, unless
remedied by the Company; (ii) any failure by the Company to pay any form of
compensation stated in each Employment Agreement, unless remedied by the
Company; (iii) requiring such individual to be based at any office or location
30 miles or more from the current location of the Company, other than travel
reasonably required in the performance of such individual's responsibilities;
(iv) any purported termination by the Company of such individual's employment
other than due to death or for Good Cause; or (v) any failure of the Company to
require a successor of the Company to assume the terms of the Employment
Agreement. The term "Good Cause" is defined in each Employment Agreement,
generally to mean (i) such individual has been convicted of a felony that is no
longer subject to direct appeal, (ii) such individual has been adjudicated to be
mentally incompetent so as to affect his ability to serve the Company and such
adjudication is no longer subject to direct appeal, or (iii) such individual has
been found guilty of fraud or willful misfeasance so as to materially damage the
Company and such finding is no longer subject to direct appeal.
In connection with the execution of their Employment Agreements, both
Messrs. Reeves and Mayell were granted a 2% net profits interest in the oil and
natural gas production from the Company's properties to the extent the Company
acquires a mineral interest therein. The net profits interest for Messrs. Reeves
and Mayell applies to all properties on which the Company expends funds during
their employment with the Company. The net profits interests represent real
property rights that are not subject to vesting or continued employment with the
Company. Messrs. Reeves and Mayell will not participate in the Well Bonus Plans
(as such term is defined under "-Well Bonus Plans and NPI Rights" below) for any
particular property to the extent the original net profits interest grant covers
such property. See also note 3 under "-Summary Compensation Table" above and
"-Well Bonus Plans and NPI Rights" below.
Mr. P. Richard Gessinger entered into an employment agreement with the
Company under which he is given the title Chief Financial Officer and Executive
Vice President of the Company. Mr. Gessinger's employment agreement provides
that he will receive a monthly salary of $18,027 and an annual bonus at the
discretion of the Company's Board of Directors. If Mr. Gessinger is terminated,
depending on the circumstances, he may be entitled to a payment equal to twelve
times his monthly salary. If a change in control of the Company occurs, he may
be entitled to receive his monthly salary for twelve months after such event.
Mr. Lloyd V. DeLano entered into an employment agreement with the
Company under which he is given the title Vice President of the Company. Mr.
DeLano's employment agreement provides that he will receive a monthly salary of
$13,461 and an annual bonus in the amount determined in
-14-
<PAGE> 18
the discretion of the Company's Board of Directors. If Mr. DeLano is terminated,
depending on the circumstances, he may be entitled to receive a payment equal to
six times his monthly salary. Also, if a change in control of the Company
occurs, he may be entitled to receive his monthly salary for eighteen months
after such event.
Mr. James W. Carrington, Jr. entered into an employment agreement with
the Company under which he is given the title Vice President - Land. Mr.
Carrington's employment agreement provides that he will receive a monthly salary
of $13,366 and an annual bonus in the amount determined in the discretion of the
Company's Board of Directors. If Mr. Carrington is terminated, depending on the
circumstances, he may be entitled to receive a payment equal to six times his
monthly salary. Also, if a change in control of the Company occurs, he may be
entitled to receive his monthly salary for eighteen months after such event.
THE INCENTIVE PLANS
The Incentive Plans authorize the Board of Directors or a Committee of
the Board of Directors to issue stock options, stock appreciation rights,
restricted stock and performance awards. The aggregate number of shares of
Common Stock that currently may be issued under the Incentive Plans is
5,832,786, which represents approximately 12% of the total number of shares of
Common Stock outstanding. This number may change in order to maintain that
number at 10% of the total number of shares of Common Stock outstanding. There
are currently 4,998,800 shares allocated to outstanding options or existing or
future stock rights under deferred compensation arrangements under the Incentive
Plans. Therefore, approximately 153,000 shares are available for grant of
additional options or stock-based compensation. As of December 31, 1999, none of
the stock options granted under the Incentive Plans were "in-the-money".
WELL BONUS PLANS AND NPI RIGHTS
During 1998, the Company implemented a new net profits program that was
adopted effective as of November 1997. All employees participate in this
program. Pursuant to this program, the Company adopted three separate well bonus
plans: (i) The Meridian Resource Corporation Geoscientist Well Bonus Plan (the
"Geoscientist Plan"); (ii) The Meridian Resource Corporation TMR Employees Trust
Well Bonus Plan (the "Trust Plan") and (iii) The Meridian Resource Corporation
Management Well Bonus Plan (the "Management Plan", and with the Trust Plan and
the Geoscientist Plan, the "Well Bonus Plans"). The Executive Committee of the
Board of Directors, which is comprised of Messrs. Reeves and Mayell, administers
each of the Well Bonus Plans. The participants in each of the Well Bonus Plans
are designated by the Executive Committee in its sole discretion. Participants
in the Management Plan are limited to executive officers of the Company and
other key management personnel designated by the Executive Committee. Neither
Messrs. Reeves nor Mayell will participate in the Management Plan, except with
respect to a small number of wells and prospects not covered by their original
net profits grants described under "-Employment Agreements" above. The
participants in the Trust Plan generally will be all employees of the Company
that do not participate in one of the other Well Bonus Plans. Pursuant to the
Well Bonus Plans, the Executive Committee designates, in its sole discretion,
the individuals and wells that will participate in each of the Well Bonus Plans.
The Executive Committee also
-15-
<PAGE> 19
determines the percentage bonus that will be paid under each well and the
individuals that will participate thereunder. The Well Bonus Plans cover all
properties on which the Company expends funds during each participant's
employment with the Company, with the percentage bonus generally ranging from
less than .1% to .5% of the net profits derived from each well included in the
well bonus plan, depending on the level of the employee.
The Company intends for the Well Bonus Plans to provide an ongoing
incentive to align the interests of the Company's employees with the Company's
discovery, development and production activities. Participation in the Well
Bonus Plans is subject to, among other things, a vesting period, except for
grants in 1998 for which certain employees were deemed vested, noncompete
provisions and the general credit of the Company. Payments under vested bonus
rights will continue to be made after an employee leaves the employment of the
Company. The Company has the option to make payments in whole, or in part,
utilizing shares of Common Stock. The determination whether to pay cash or issue
Common Stock will be based upon a variety of factors, including the Company's
current liquidity position and the fair market value of the Common Stock at the
time of issuance. The Well Bonus Plans are subject to periodic review and
adjustment by the Executive Compensation Committee and the Employee Compensation
Committee.
EXECUTIVE OFFICERS
The following table provides information with respect to the executive
officers of the Company. Each executive officer has been elected to serve until
his or her successor is duly appointed or elected by the Board of Directors or
his or her earlier removal or resignation from office.
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED
NAME OF OFFICER POSITION WITH THE COMPANY AGE AS OFFICER
- ------------------------------ --------------------------------------------------- ---- ------------
<S> <C> <C> <C>
Joseph A. Reeves, Jr. Chairman of the Board 53 1990
and Chief Executive Officer
Michael J. Mayell Director and President 53 1990
P. Richard Gessinger Executive Vice President and Chief Financial Officer 51 1997
Lloyd V. DeLano Vice President and Chief Accounting Officer 49 1993
James W. Carrington, Jr. Vice President - Land - TMRX 49 1998
</TABLE>
- ----------------------------------
For additional information regarding Messrs. Reeves and Mayell, see
"Directors", above.
P. Richard Gessinger joined the Company as Executive Vice President and
Chief Financial Officer in 1997. Prior to assuming such position with the
Company, Mr. Gessinger gained an extensive background in energy finance over the
prior 28 years as a commercial banker, investment
-16-
<PAGE> 20
banker and entrepreneur for such firms as Rauscher Pierce Refsnes, Inc., Bear,
Stearns & Co. Inc., Citicorp Investment Bank and Manufacturers Hanover Trust
Company.
Lloyd V. DeLano joined the Company in January 1992 performing contract
work and became an employee of the Company in October 1992. Mr. DeLano was named
Vice President - Director of Accounting of The Meridian Resource & Exploration
Company (a wholly owned subsidiary of the Company) in April 1993 and in June
1996 was named Vice President and Chief Accounting Officer of the Company. Mr.
DeLano is a Certified Public Accountant with 27 years of oil and natural gas
experience.
James W. Carrington, Jr. joined the Company in March 1998 as Vice
President of Land of The Meridian Resource & Exploration Company (a wholly owned
subsidiary of the Company). Prior to assuming his position with the Company, Mr.
Carrington was employed by CNG Producing Company.
Other than Mr. Bond, who is Mr. Mayell's father-in-law, there are no
family relationships among the officers and directors of the Company.
-17-
<PAGE> 21
STOCK PERFORMANCE GRAPH
The following performance graph compares the performance of the Common
Stock to the New York Stock Exchange Market Index and Peer Group Index from
December 31, 1994 through December 31, 1999. The graph assumes that the value of
the investment in the Common Stock and each index was $100 at December 31, 1994,
and that all dividends were reinvested.
[INSERT LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
<TABLE>
<CAPTION>
December 31, 1994 1995 1996 1997 1998 1999
------ ------ ------ ------
<S> <C> <C> <C> <C>
The Company 100 140 175 98 33 31
NYSE Market Index 100 130 156 205 245 268
Peer Group Index 100 131 160 162 153 190
</TABLE>
Assumes: $100 invested on December 31, 1994 all dividends reinvested and fiscal
year ending December 31. The Company's Peer Group is comprised of Anadarko
Petroleum Corporation, Apache Corporation, Burlington Resources Inc., Chesapeake
Energy Corporation, Consolidated Natural Gas Company, EEX Corporation, Enron
Corp., Noble Affiliates, Inc., Oryx Energy Company, Pogo Producing Company,
Questar Corporation, Seagull Energy Corporation, SONAT Inc., Union Pacific
Resources Group Inc. and The Williams Company Inc.
-18-
<PAGE> 22
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of April 7, 2000, with
respect to the beneficial ownership of Common Stock by (a) each director, (b)
each Named Executive Officer, (c) each shareholder known by the Company to be
the beneficial owner of more than 5% of the Common Stock and (d) all executive
officers and directors of the Company as a group.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
BENEFICIALLY
NAME OWNED(1) PERCENT
- ---------------------------------------------------- ----------------- -----------
<S> <C> <C>
Joseph A. Reeves, Jr. (2)......................... 2,865,411 5.8
Michael J. Mayell (3)............................. 2,767,107 5.6
P. Richard Gessinger (4).......................... 97,165 *
Lloyd V. DeLano (5)............................... 105,547 *
James W. Carrington, Jr. (6)...................... 39,119 *
James T. Bond (7)................................. 35,500 *
E. L. Henry (8)................................... 7,500 *
Joe E. Kares (9).................................. 18,750 *
Gary A. Messersmith (10).......................... 57,380 *
Jack A. Prizzi (11)............................... 10,000 *
All executive officers and directors as a group (10
persons) (2), (3), (4), (5), (6), (7), (8), (9), 6,003,479 11.6
(10), (11)........................................
Shell Oil Company (12)............................ 24,919,458 41.9
KAIM Non-Traditional LP (13)...................... 5,039,084 10.8
Phemus Corporation (14)........................... 2,725,860 5.8
</TABLE>
- -------------------------------
* Less than one percent.
(1) Shares of Common Stock which are not outstanding but which can be
acquired by a person upon exercise of an option or warrant within sixty
days are deemed outstanding for the purpose of computing the percentage
of outstanding shares beneficially owned by such person.
(2) Includes 472,555 shares, 714,000 shares, and 1,031,000 shares of Common
Stock that Mr. Reeves has the right to acquire upon the exercise of the
General Partner Warrant, Executive Warrants, and stock options under
the Company's stock option plans, respectively. Also includes 260,302
vested shares underlying deferred compensation arrangements. Excludes
234,841 unvested shares under deferred compensation arrangements and
750,000 shares underlying options not exercisable within 60 days. Mr.
Reeves' business address is 1401 Enclave Parkway, Suite 300, Houston,
Texas 77077.
-19-
<PAGE> 23
(3) Includes 472,555 shares, 714,000 shares, and 1,031,000 shares of Common
Stock that Mr. Mayell has the right to acquire upon the exercise of the
General Partner Warrant, Executive Warrants, and stock options under
the Company's stock option plans, respectively. Also includes 260,302
vested shares underlying deferred compensation arrangements. Excludes
234,841 unvested shares under deferred compensation arrangements and
750,000 shares underlying options not exercisable within 60 days. Mr.
Mayell's business address is 1401 Enclave Parkway, Suite 300, Houston,
Texas 77077.
(4) Includes 20,750 shares of Common Stock that Mr. Gessinger has the right
to acquire upon the exercise of stock options. Excludes 8,250 shares
underling options not exercisable within 60 days.
(5) Includes 67,500 shares of Common Stock that Mr. DeLano has the right to
acquire upon the exercise of stock options. Excludes 12,500 shares
underling options not exercisable within 60 days.
(6) Includes 11,250 shares of Common Stock that Mr. Carrington has the
right to acquire upon the exercise of stock options. Excludes 6,250
shares underling options not exercisable within 60 days.
(7) Includes 22,500 shares of Common Stock that Mr. Bond has the right to
acquire upon the exercise of stock options. Excludes 7,500 shares
underlying options not exercisable within 60 days.
(8) Includes 7,500 shares of Common Stock that Mr. Henry has the right to
acquire upon the exercise of stock options. Excludes 22,500 shares
underlying options that are not exercisable within 60 days.
(9) Includes 18,750 shares of Common Stock that Mr. Kares has the right to
acquire upon the exercise of stock options. Excludes 11,250 shares
underlying options not exercisable within 60 days.
(10) Includes 26,250 shares of Common Stock that Mr. Messersmith has the
right to acquire upon the exercise of stock options. Excludes 18,750
shares underlying options not exercisable within 60 days.
(11) Includes 7,500 shares of Common Stock that Mr. Prizzi has the right to
acquire upon the exercise of stock options. Excludes 7,500 shares
underlying options not exercisable within 60 days.
(12) Based solely upon a Schedule 13D filed with the Securities and Exchange
Commission. Shell Oil Company controls Shell Louisiana Onshore
Properties Inc. ("SLOPI"), which is the record holder of 12,082,030
shares of Common Stock and preferred stock that is convertible into
12,837,428 shares of Common Stock. Shell Oil Company's business address
is One Shell Plaza, Houston, Texas 77002. SLOPI's business address is
P.O. Box 7986, Newark, Delaware. Includes 12,082,030 shares of Common
Stock as well as 12,837,428 shares of Common Stock issuable upon
conversion of the Preferred Stock.
(13) The business address of KAIM Non-Traditional, L.P., is 1800 Avenue of
the Stars, 2nd Floor, Los Angeles, California 90067.
(14) Based solely upon a Schedule 13G filed with the Securities and Exchange
Commission. The business address of Phemus Corporation is 600 Atlantic
Avenue, Boston, Massachusetts 02210-2203. Includes 20,000 shares
underlying stock options exercisable within 60 days.
-20-
<PAGE> 24
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SHELL TRANSACTION
On June 30, 1998, the Company acquired all of Shell's onshore oil and
gas property interests located in south Louisiana pursuant to two separate
transactions (the "Shell Transactions"). The Shell Transactions were consummated
pursuant to a merger (the "LOPI Transaction") between a wholly owned subsidiary
of the Company and Louisiana Onshore Properties Inc. ("LOPI"), an indirect
wholly owned subsidiary of Shell Oil Company, and a separate cash purchase of
oil and gas properties (the "SWEPI Acquisition" and with the LOPI Transaction,
the "Shell Transactions") from Shell Western E&P Inc., an indirect wholly owned
subsidiary of Shell Oil Company ("SWEPI"). The LOPI Transaction was consummated
pursuant to the terms and conditions of an Agreement and Plan of Merger dated
March 27, 1998 (the "LOPI Agreement"), between the Company, a wholly owned
subsidiary of the Company, LOPI and SLOPI. Pursuant to the terms of the LOPI
Agreement, upon consummation of the merger, the Company issued to SLOPI
12,082,030 shares of Common Stock and 3,982,906 shares of Preferred Stock that
are convertible into a total of 12,837,428 shares of Common Stock. In light of
the large ownership position that was issued to SLOPI in the LOPI Transaction
and in recognition of both the Company's and SLOPI's desire that the Company
function as an independent oil and gas company, SLOPI and the Company entered
into certain arrangements that define and limit SLOPI's and the Company's
respective rights and obligations. These arrangements between the parties are
defined in the Stock Rights and Restrictions Agreement, the Certificate of
Designation and a Registration Rights Agreement dated June 30, 1998 (the
"Registration Rights Agreement"), between the Company and SLOPI, which are
summarized below.
The SWEPI Acquisition was consummated pursuant to the terms and
conditions of a Purchase and Sale Agreement dated effective as of October 1,
1997, between a subsidiary of the Company and SWEPI. The Company paid $42.5
million in cash for the oil and gas property interests acquired in the SWEPI
Acquisition, which is subject to adjustment based upon production and expenses
after October 1, 1997.
Stock Rights and Restrictions Agreement
The Stock Rights and Restrictions Agreement contains terms and
provisions that limit SLOPI's and its affiliates' control of the Company while
protecting their interests in the context of certain extraordinary transactions
by (i) allowing SLOPI to maintain representation on the Company's Board of
Directors, (ii) restricting SLOPI's and its affiliates' ability to propose or
effect certain business combinations with the Company, (iii) restricting the
ability of SLOPI and its affiliates to sell certain portions of their shares of
Common Stock and Preferred Stock, subject to certain exceptions designed to
permit them to sell such shares over time and to sell such shares in the event
of certain business combinations involving the Company, (iv) limiting SLOPI's
and its affiliates' discretionary voting rights to 23% of the total voting
shares, except with respect to certain extraordinary events and in situations in
which the average per share market value of the Common Stock has been less than
$5.50 per share or the Company is in material breach of its obligations under
the agreements governing the LOPI Transaction, (v) permitting SLOPI and its
affiliates to purchase additional securities of the Company in order to maintain
a 21% beneficial ownership interest of the Common Stock if the Company proposes
to issue additional shares of Common Stock or securities convertible into Common
Stock, (vi) restricting SLOPI's and its affiliates' ability to purchase
additional shares of Common Stock and (vii) allowing SLOPI and its affiliates to
receive
-21-
<PAGE> 25
additional shares of Common Stock or cash in the event they sell shares of
Common Stock received upon conversion of the Preferred Stock for less than the
conversion price in effect on the date of conversion of such Preferred Stock.
Directors. The Stock Rights and Restrictions Agreement and the
Certificate of Designation together provide that SLOPI may elect at least one
member of the Company's Board of Directors and additional members in the event
the number of Board seats is increased to ten or more so that SLOPI is able to
nominate that number of directors that equals the product (rounded downward to
the nearest whole number, but in no event less than one) of the total number of
directors following such election multiplied by 20%. So long as there is at
least one director elected by the holders of Preferred Stock serving on the
Company's Board of Directors, at least one director elected by the holders of
Preferred Stock is required to be a member of the Company's audit committee.
Business Transactions. Subject to certain limited exceptions, the Stock
Rights and Restrictions Agreement prohibits SLOPI and its affiliates from
engaging or proposing to engage in any business combination transaction with the
Company unless such proposal is made after June 30, 2001, and on the date such
transaction is proposed, there is no Preferred Director or director nominated by
SLOPI and its affiliates serving on the Board of Directors.
Transfer Restrictions. The Stock Rights and Restrictions Agreement
generally prohibits SLOPI and its affiliates from selling or otherwise
transferring the shares of Common Stock and Preferred Stock owned by them;
provided, however, beginning on June 30, 2000, they may sell an incremental 25%
of the Common Stock issued in the LOPI Transaction or upon conversion of the
Preferred Stock until June 30, 2003, at which time, they may sell 100% of such
shares of Common Stock. In addition, beginning on June 30, 2001, SLOPI and its
affiliates may sell or transfer an incremental one-third of the shares of
Preferred Stock issued in the LOPI Transaction until June 30, 2003, at which
time they may sell or transfer 100% of such Preferred Stock. SLOPI and its
affiliates, however, may sell their shares of Common Stock and Preferred Stock
owned by them at any time in connection with a tender offer for the Common
Stock, subject to a right of first refusal by the Company to purchase such
shares at 105% of the tender offer price.
Limitation on Purchase of Common Stock. Subject to certain limited
exceptions, the Stock Rights and Restrictions Agreement prohibits SLOPI and its
affiliates from purchasing or acquiring any additional shares of Common Stock
(except upon conversion of the Preferred Stock or future share issuances
required by the LOPI Agreement or Stock Rights and Restrictions Agreement) until
June 30, 2001.
Voting Rights. The Stock Rights and Restriction Agreement provides that
SLOPI and its affiliates shall be entitled to vote, in their complete discretion
and on all matters, such number of its shares of Voting Stock that constitute up
to 23% of the then outstanding shares of Voting Stock eligible to be cast for
such matter. SLOPI and its affiliates will be required to vote any shares of
Voting Stock that are in excess (the "Excess Shares") of 23% of the then
outstanding shares of voting stock with the votes of all shares other than the
Excess Shares that are actually voted for, against or abstain from voting on the
matter. SLOPI's and its affiliates' voting rights will not be limited and they
will have discretionary voting rights with respect to all Voting Shares owned by
them in the event (i) the matter to be voted on involves certain business
combination transactions, (ii) the matter to be voted on involves a change of
control of the Company or (iii) on the date the matter is voting on the average
per share market value for the Common Stock is less than $5.50 per
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<PAGE> 26
share. Currently, the average per share market value of the Common Stock is
below $5.50 per share; therefore, it is assumed that SLOPI's discretionary
voting rights will not be limited.
Shell Purchase Rights. The Stock Rights and Restrictions Agreement
provides that, if SLOPI and its affiliates beneficially own shares of Common
Stock that after consummation of a proposed transaction by the Company would
represent less than 21% of the outstanding shares of Common Stock, the Company
shall provide SLOPI and its affiliates the right to purchase shares of Common
Stock (or securities exchangeable into Common Stock) such that, following
SLOPI's purchase and the consummation of the contemplated transaction, SLOPI and
its affiliates would beneficially own 21% of the Common Stock.
Company Support of Certain Stock Sales. The Stock Rights and
Restrictions Agreement provides that if the proceeds received by SLOPI and its
affiliates on the sale of Common Stock issued upon conversion of the Preferred
Stock is less than approximately $10.52 per share, the Company shall pay in cash
an amount equal to, or issue additional shares of Common Stock to SLOPI and its
affiliates equal in amount to, the difference between the proceeds received on
the sale of such Common Stock and $10.52 per share.
Certificate of Designation
The terms of the Preferred Stock are set forth in the Certificate of
Designation. The Preferred Stock has an aggregate stated value of $135 million
and ranks prior to the Common Stock as to distribution of assets and payment of
dividends. The Preferred Stock is entitled to receive, when and as declared by
the Board of Directors, a cash dividend at the rate of 4% per annum on the
stated value per share; provided, however, dividends shall cease to accrue on an
incremental one-third of the shares of Preferred Stock on the third, fourth and
fifth anniversaries of the LOPI Transaction so that no dividends will accrue on
any shares of Preferred Stock after June 30, 2003. Each share of Preferred Stock
is entitled to one vote on matters submitted to the Company's shareholders for
their approval. Until the earlier of (i) the termination of the Stock Rights and
Restrictions Agreement and (ii) SLOPI and its affiliates beneficially own less
than 21% of the outstanding Common Stock, the holders of the Preferred Stock may
elect at least one member of the Company's Board of Directors and additional
members in the event the number of Board seats is increased to ten or more so
that SLOPI is able to nominate that number of directors (each a "Preferred
Director") that equals the product (rounded downward to the nearest whole
number, but in no event less than one) of the total number of directors
following such election multiplied by 20%. The Preferred Stock may be converted
into Common Stock at any time by the holder thereof. In addition, on or after
June 30, 2001, the Preferred Stock will automatically convert into Common Stock
in the event the mean Per Share Market Value (as defined in the Certificate of
Designation) exceeds 150% of the conversion price (approximately $10.52 per
share) for 75 consecutive trading days.
Registration Rights Agreement
The shares of Common Stock issued in the LOPI Transaction and the
shares of Common Stock that will be issued upon conversion of the Preferred
Stock are restricted stock and are not freely transferable and tradable.
Therefore, the Company and SLOPI entered into the Registration Rights Agreement
to facilitate the sale or transfer of the shares of Common Stock owned by SLOPI.
SLOPI and its affiliates will have the right to require the Company to file a
registration Statement with the Securities and Exchange Commission on ten
separate occasions for the resale of all or a
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<PAGE> 27
portion of the eligible Common Stock owned by SLOPI. However, the Company will
not be obligated to file a requested registration Statement in the event that
the aggregate number of shares of eligible Common Stock to be included in such
requested registration is less than 2 1/2% of the issued and outstanding Common
Stock or if the Company reasonably determines that the filing thereof at the
time requested, or the offering of the eligible Common Stock pursuant thereto,
would materially and adversely affect a pending or proposed offering of
securities of the Company or other transaction or require premature disclosure
of information not otherwise required to be disclosed to the potential detriment
of the Company. In addition, if the Company at any time proposes to file a
registration Statement relating to a public offering of Common Stock to be sold
for cash that would permit the registration of eligible Common Stock held by
SLOPI and its affiliates, SLOPI and its affiliates will be entitled to include
all or a portion of the eligible Common Stock owned by them in such registration
Statement and offering unless it is determined that the distribution of such
stock would materially adversely affect the distribution of the securities being
registered for sale by the Company, in which case SLOPI's participation in such
registration will be reduced.
PARTICIPATION INTERESTS
In the ordinary course of business, the Company offers participation in
exploration prospects to industry partners. Terms of each participation vary
depending on the risk and economic conditions existing in the oil and gas
industry at the time of grant. In addition, in an effort to provide the
Company's executive officers and key employees with additional incentive to
identify and develop successful exploratory prospects for the Company, the
Company has adopted a policy of offering to its principal executive officers and
key employees responsible for the identification and development of prospects
the right to participate in each of the prospects pursued by the Company. Such
participation is required to be on the same terms and conditions as the Company
and its outside partners and is currently limited in aggregate to an approximate
8% working interest in any prospect. The maximum percentage that either Messrs.
Reeves and Mayell may elect to participate in any prospect is a 3.5% working
interest. Since 1994, each of Messrs. Reeves and Mayell have participated in
every prospect that the Company has drilled on a 1.5% working interest basis
(other than the Chocolate Bayou Field in which they had a 3.5% interest and
certain prospects completed prior to 1994, in which Messrs. Reeves and Mayell
have working interests of up to 2.5%) and upon the same terms and conditions as
other third party working interest owners.
During 1999, both Messrs. Reeves and Mayell, either personally or
through wholly owned or affiliated corporations, participated as working
interest owners in properties of the Company. Under the terms of the operating
and other agreements relating to the Company's wells and prospects, the Company,
as operator, incurs various expenses relating to the prospect or well that are
then billed to the working interest owner. During 1999, each of TODD (a company
owned by Mr. Reeves) and Sydson (a company owned by Mr. Mayell) were indebted to
the Company for certain expenses paid by the Company in respect of their working
interest in various prospects and wells in which the Company acted as operator.
TODD and Sydson collectively invested approximately $3,974,000 for the
year ended December 31, 1999, in oil and natural gas drilling activities for
which the Company was the operator. Collective amounts due from such entities
for such activities were approximately $178,000 as of December 31, 1999, which
have been netted by amounts owed to them from the Company. The Company executed
note agreements with TODD and Sydson dated December 31, 1997, for $1,510,699
each related to certain amounts due, which was paid in full during 1999.
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<PAGE> 28
OTHER
Joe E. Kares, a member of the Executive Compensation Committee, is a
partner in the public accounting firm of Kares & Cihlar, which provided the
Company and its affiliates with accounting services for the years ended December
31, 1999, 1998 and 1997 and received fees of approximately $283,000, $57,000 and
$27,000, respectively. These fees exceeded 5% of the gross revenues of Kares &
Cihlar for 1999. The Company believes that these fees were equivalent to the
fees that would have been paid to similar firms providing its services in arm's
length transactions.
Mr. Messersmith is a partner in the law firm of Fouts & Moore, L.L.P.,
in Houston, Texas, which periodically provides legal services for the Company.
In addition, the Company has Mr. Messersmith on personal retainer of $8,333.33
per month relating to services provided to the Company personally by Mr.
Messersmith. Mr. Messersmith also participates in the Well Bonus Plans pursuant
to which he was paid approximately $46,000 and received 19,000 shares of the
Company's common stock during 1999.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors and greater than ten-percent shareholders are
required by the regulations promulgated under Section 16(a) to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the period from
January 1, 1999, through December 31, 1999, all filing requirements applicable
to officers, directors and greater than ten-percent shareholders were in
compliance.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Ernst & Young LLP served as the Company's principal independent
accountants for the fiscal year ended December 31, 1999, and has been
recommended by the Audit Committee to so serve for the current year. A
representative of Ernst & Young LLP will attend the Meeting with the opportunity
to make a statement if he or she desires to do so and to respond to appropriate
questions.
OTHER BUSINESS
Management does not intend to bring any business before the Meeting
other than the matters referred to in the accompanying notice and at this date
has not been informed of any matters that may be presented to the Meeting by
others. If, however, any other matters properly come before the Meeting, it is
intended that the persons named in the accompanying proxy will vote, pursuant to
the proxy, in accordance with their best judgment on such matters.
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<PAGE> 29
SHAREHOLDER PROPOSALS
Any proposal by a shareholder to be presented at the Company's 2001
Annual Meeting of Shareholders (the "2001 Annual Meeting") must be received by
the Company no later than February 28, 2001, in order to be eligible for
inclusion in the Company's Proxy Statement and proxy used in connection with the
2001 Annual Meeting. In addition, the Company's bylaws provide that in order for
business to be properly brought before such meeting, such business must be (i)
specified in the notice of the 2001 Annual Meeting (or any supplement thereto)
given by or at the direction of the Board of Directors, (ii) otherwise properly
brought before the 2001 Annual Meeting by or at the direction of the Board of
Directors or (iii) otherwise properly brought before the meeting by a
shareholder who (A) is a shareholder of record on the date of the giving of the
notice provided for below and on the record date for the determination of
shareholders entitled to vote at the 2001 Annual Meeting and (B) gives timely
notice of such business in writing to the Secretary of the Company. For purposes
of the preceding sentence, to be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Company no earlier than February 28, 2001 and no later than March 29, 2001;
provided, however, that in the event that the 2001 Annual Meeting is called for
date that is not within 30 days of June 27, 2001, notice by the shareholder to
be timely must be so received not later than the close of business on the tenth
day following the day on which such notice of the date of the 2001 Annual
Meeting was mailed or public disclosure of the 2001 Annual Meeting date was
made, whichever occurs first. A shareholder's notice to the Secretary of the
Company shall set forth (i) a brief description of each matter desired to be
brought before the 2001 Annual Meeting and the reasons for conducting such
business at the 2001 Annual Meeting, (ii) the name and record address of the
shareholder proposing such business, (iii) the class and number of shares of the
Company that are beneficially owned by the shareholder, (iv) any material
interest of the shareholder in such business and (v) a representation that such
shareholder intends to appear in person or by proxy at the 2001 Annual Meeting
to bring such business before such meeting.
By order of the Company's Board of Directors
Joseph A. Reeves, Jr.
Chairman of the Board and
Chief Executive Officer
May 1, 2000
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<PAGE> 30
THE MERIDIAN RESOURCE CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of The Meridian Resource Corporation, a
Texas corporation (the "Company"), hereby constitutes and appoints Joseph A.
Reeves, Jr. and Michael J. Mayell, and each of them, his true and lawful agents
and proxies, as proxies, with full power of substitution in each, to vote, as
designated on the reverse side, all shares of Common Stock, $.01 par value, of
the Company which the undersigned would be entitled to vote at the Annual
Meeting of Shareholders of the Company to be held June 27, 2000 and at any
adjournment(s) thereof, on the following matters more particularly described in
the Proxy Statement dated May 1, 2000.
(To Be Signed on REVERSE SIDE)
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
[X} Please mark your
votes as in this
example
1. Election of Class I Directors Receipt is hereby acknowledged of the
Notice of Annual Meeting of Shareholders
Nominees: and Proxy Statement, each dated May 1,
James T. Bond 2000, and the Annual Report to
Jack A. Prizzi Shareholders of the Company for the year
[ ] FOR both nominees ended December 31, 1999.
(except as marked to the contrary)
[ ] WITHHOLD authority to vote for both nominees
INSTRUCTION: IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR EITHER
INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE
LIST ABOVE.)
2. In their discretion the proxies are authorized to vote upon such Please mark, sign, date and return this
other business as may properly come before the meeting or any proxy card promptly using the enclosed
adjournment thereof. envelope.
SIGNATURE(S) DATE , 2000
-------------------------------------------------- ----------------------------------
Note: Please sign your name exactly as name appears hereon. Co-fiduciaries and joint owners must each sign. When signing as
attorney, executor, administrator, trustee of guardian, please give full title as such. If a corporation, please sign in
the full corporate name by the president or other authorized officer. If a partnership, please sign in the partnership
name by authorized person.
</TABLE>
<PAGE> 31
THE MERIDIAN RESOURCE CORPORATION
SHELL LOUISIANA ONSHORE PROPERTIES INC.
COMMON STOCK PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of The Meridian Resource Corporation, a
Texas corporation (the "Company"), hereby constitutes and appoints Joseph A.
Reeves, Jr. and Michael J. Mayell, and each of them, its true and lawful agents
and proxies, as proxies, with full power of substitution in each, to vote, all
shares of Common Stock, $.01 par value, of the Company which the undersigned
would be entitled to vote at the Annual Meeting of Shareholders of the Company
to be held June 27, 2000 and at any adjournment(s) thereof, on the following
matters more particularly described in the Proxy Statement dated May 1, 2000, as
follows: (i) as designated below for shares of Common Stock for which the
undersigned has discretionary voting rights as provided in Section 2.5 of the
Stock Rights and Restrictions Agreement dated June 30, 1998 (the "Stock Rights
and Restrictions Agreement") between the undersigned and the Company and (ii) as
required by the terms of the Stock Rights and Restrictions Agreement for shares
of Common Stock for which the undersigned does not have discretionary voting
rights as provided in Section 2.5 of the Stock Rights and Restrictions
Agreement.
<TABLE>
<S> <C> <C>
[X] Please mark your
votes as in this
example
WITHHOLD authority
FOR the to vote for the
following nominee named
nominees herein
1. Election of [ ] [ ] Nominees: 2. In their discretion the proxies are authorized
Class I James T. Bond to vote upon such other business as may
Directors Jack A. Prizzi properly come before the meeting.
Receipt is hereby acknowledged of the Notice
of Annual Meeting of Shareholders and Proxy
Statement, each dated May 1, 2000, and the
Annual Report to Shareholders of the Company
for the year ended December 31, 1999.
Please mark, sign, date and return this proxy
card promptly using the enclosed envelope.
SHELL LOUISIANA ONSHORE PROPERTIES INC.
By
------------------------------------------------------------
Name:
---------------------------------------------------------
Title: DATE , 1998
-------------------------------------------------------- ------------------------------------------
Note: Please sign your name exactly as name appears hereon. Co-fiduciaries and joint owners must each sign. When signing as
attorney, executor, administrator, trustee of guardian, please give full title as such. If a corporation, please sign in
the full corporate name by the president or other authorized officer. If a partnership, please sign in the partnership
name by authorized person.
</TABLE>
<PAGE> 32
THE MERIDIAN RESOURCE CORPORATION
SHELL LOUISIANA ONSHORE PROPERTIES INC.
PREFERRED STOCK PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of the Series A Cumulative Preferred Stock of
The Meridian Resource Corporation, a Texas corporation (the "Company"), hereby
constitutes and appoints Joseph A. Reeves, Jr. and Michael J. Mayell, and each
of them, its true and lawful agents and proxies, as proxies, with full power of
substitution in each, to vote, as designated below, all shares of Preferred
Stock, $1.00 par value, of the Company which the undersigned would be entitled
to vote at the Annual Meeting of Shareholders of the Company to be held June 27,
2000 and at any adjournment(s) thereof, on the following matters more
particularly described in the Proxy Statement dated May 1, 2000.
<TABLE>
<S> <C> <C>
[X] Please mark your
votes as in this
example
WITHHOLD authority
FOR the to vote for the
following nominee named
nominees herein
1. Election of [ ] [ ] Nominees: 2. In their discretion the proxies are authorized
Class II James T. Bond to vote upon such other business as may
Directors Jack A. Prizzi properly come before the meeting.
Receipt is hereby acknowledged of the Notice of
Annual Meeting of Shareholders and Proxy
Statement, each dated May 1, 2000, and the Annual
Report to Shareholders of the Company for the
year ended December 31, 1999.
Please mark, sign, date and return this proxy
card promptly using the enclosed envelope.
2. Election of [ ] [ ] Nominees:
Preferred J.H. Sheffield
Director
SHELL LOUISIANA ONSHORE PROPERTIES INC.
By
------------------------------------------------------------
Name:
---------------------------------------------------------
Title: DATE , 2000
-------------------------------------------------------- ------------------------------------------
Note: Please sign your name exactly as name appears hereon. Co-fiduciaries and joint owners must each sign. When signing as
attorney, executor, administrator, trustee of guardian, please give full title as such. If a corporation, please sign in
the full corporate name by the president or other authorized officer. If a partnership, please sign in the partnership
name by authorized person.
</TABLE>
