The Meridian Resource Corporation (NYSE:TMR) has exercised its conversion option on one-third of the remaining issued and outstanding Series "C" Redeemable Convertible Preferred Stock (the "Series "C" Preferred Stock"). Pursuant to the terms of the Series "C" Preferred Stock agreement, the Company could elect to convert up to one-third of the then outstanding Series "C" Preferred Stock into shares of its Common Stock upon obtaining a closing price of its Common Stock greater than 150% of the $4.45 conversion price for thirty out of forty consecutive trading days. This occurred on June 1, 2004, whereupon the Company notified the holders of its Series "C" Preferred Stock of the Company's intention to convert one-third of the issued and outstanding shares into approximately 3,637,200 shares of its Common Stock bringing the total outstanding Common Stock to 72.3 million shares.
The conversion will be completed on a pro rata basis and will include a cash payment for accrued and unpaid dividends through the June 8, 2004 conversion date, at which time dividends will cease to accrue on the converted shares. Based on this conversion and previously announced voluntary conversions, the Company's outstanding Series "C" Preferred Stock has been reduced from a high of approximately $72.7 million during 2003 to a current level of approximately $32.4 million, representing a cash savings in dividends of approximately $3.4 million on an annualized basis.