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Agreement and Plan of Merger

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Title:

Agreement and Plan of Merger

Entities:

Facet Holdings Corp; Lehman Brothers Inc.; Baker Botts; Skadden, Arps, Slate, Meagher & Flom LLP; Vinson & Elkins; Weil, Gotshal & Manges LLP

Date:

2006

Size:

Preview shows 20KB of 301KB total

Price:

$99

ID:

#2515516

► Plans ► Agreements ► Agreements & Plans of Merger
► Financial
► Services ► Legal

Start of Preview

AGREEMENT AND PLAN OF MERGER

DATED AS OF SEPTEMBER 9, 2005

AMONG

FOREST OIL CORPORATION,

SML WELLHEAD CORPORATION,

MARINER ENERGY, INC.

AND

MEI SUB, INC.

================================================================================

{PAGE}

TABLE OF CONTENTS

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Article I

DEFINITIONS

ARTICLE II

THE MERGER

Section 2.1 Distribution and Merger................................................................ 11

Section 2.2 Effect on Capital Stock................................................................ 12

Section 2.3 Cancellation of Stock.................................................................. 12

Section 2.4 Stockholders Meeting................................................................... 12

Section 2.5 Closing................................................................................ 13

Section 2.6 Effective Time......................................................................... 13

Section 2.7 Closing of Transfer Books.............................................................. 13

Section 2.8 Exchange of Certificates............................................................... 13

Section 2.9 Certain Stock Options.................................................................. 15

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF FOREST

Section 3.1 Organization; Qualification............................................................ 17

Section 3.2 Corporate Authority; No Violation...................................................... 17

Section 3.3 Information Supplied................................................................... 18

Section 3.4 Brokers or Finders..................................................................... 18

Section 3.5 Forest Rights Plan..................................................................... 18

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF FOREST AND SPINCO

Section 4.1 Organization, Qualification............................................................ 19

Section 4.2 Capital Stock and Other Matters........................................................ 19

Section 4.3 Corporate Authority; No Violation...................................................... 20

Section 4.4 Spinco Financial Statements; Liabilities............................................... 21

Section 4.5 Absence of Certain Changes or Events................................................... 21

Section 4.6 Investigations; Litigation............................................................. 21

Section 4.7 Licenses; Compliance with Laws......................................................... 22

Section 4.8 Proxy Statement/Prospectus; Registration Statements.................................... 22

Section 4.9 Information Supplied................................................................... 23

Section 4.10 Environmental Matters.................................................................. 23

Section 4.11 Tax Matters............................................................................ 24

Section 4.12 Benefit Plans.......................................................................... 25

Section 4.13 Labor Matters.......................................................................... 27

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Section 4.14 Intellectual Property Matters.......................................................... 27

Section 4.15 Material Contracts..................................................................... 28

Section 4.16 Brokers or Finders..................................................................... 29

Section 4.17 Certain Board Findings................................................................. 29

Section 4.18 Vote Required.......................................................................... 29

Section 4.19 Stockholder Approval................................................................... 29

Section 4.20 Certain Payments....................................................................... 29

Section 4.21 Assets................................................................................. 29

Section 4.22 Loans.................................................................................. 30

Section 4.23 Oil and Gas Reserves................................................................... 30

Section 4.24 Derivative Transactions................................................................ 31

Section 4.25 No Other Representations and Warranties................................................ 31

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Section 5.1 Organization, Qualification............................................................ 32

Section 5.2 Capital Stock and Other Matters........................................................ 32

Section 5.3 Corporate Authority; No Violation...................................................... 33

Section 5.4 Company Financial Statements; Liabilities.............................................. 34

Section 5.5 Absence of Certain Changes or Events................................................... 34

Section 5.6 Investigations; Litigation............................................................. 35

Section 5.7 Licenses; Compliance with Laws......................................................... 35

Section 5.8 Proxy Statement/Prospectus; Registration Statements.................................... 35

Section 5.9 Information Supplied................................................................... 36

Section 5.10 Environmental Matters.................................................................. 36

Section 5.11 Tax Matters............................................................................ 37

Section 5.12 Benefit Plans.......................................................................... 38

Section 5.13 Labor Matters.......................................................................... 40

Section 5.14 Intellectual Property Matters.......................................................... 40

Section 5.15 Material Contracts..................................................................... 41

Section 5.16 Opinion of Company Financial Advisor................................................... 41

Section 5.17 Brokers or Finders..................................................................... 41

Section 5.18 Takeover Statutes...................................................................... 41

Section 5.19 Certain Board Findings................................................................. 42

Section 5.20 Vote Required.......................................................................... 42

Section 5.21 Certain Payments....................................................................... 42

Section 5.22 Assets................................................................................. 42

Section 5.23 Loans.................................................................................. 43

Section 5.24 Oil and Gas Reserves................................................................... 43

Section 5.25 Derivative Transactions................................................................ 43

Section 5.26 No Other Representations and Warranties................................................ 43

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ARTICLE VI

COVENANTS AND AGREEMENTS

Section 6.1 Conduct of Business by the Company Pending the Merger.................................. 44

Section 6.2 Conduct of Business by Spinco and Forest Pending the Merger............................ 49

Section 6.3 Proxy Statement/Prospectus............................................................. 53

Section 6.4 Cooperation............................................................................ 54

Section 6.5 Letter of Spinco's Accountants......................................................... 55

Section 6.6 Letter of the Company's Accountants.................................................... 55

Section 6.7 Forest/Spinco Employee Stock Options, Incentive and Benefit Plans...................... 55

Section 6.8 Employee Benefit Plans................................................................. 56

Section 6.9 Investigation.......................................................................... 59

Section 6.10 Reasonable Efforts; Further Assurances................................................. 60

Section 6.11 No Solicitation by the Company......................................................... 60

Section 6.12 Director and Officer Indemnification; Insurance........................................ 63

Section 6.13 Rule 145 Affiliates.................................................................... 64

Section 6.14 Public Announcements................................................................... 65

Section 6.15 Defense of Litigation.................................................................. 65

Section 6.16 Notification........................................................................... 65

Section 6.17 Obligations of Merger Sub.............................................................. 65

Section 6.18 Accounting Matters..................................................................... 65

Section 6.19 Reorganization Treatment............................................................... 66

Section 6.20 Performance Bond....................................................................... 66

ARTICLE VII

CONDITIONS TO THE MERGER

Section 7.1 Conditions to the Obligations of Spinco, Forest, the Company and Merger Sub to

Effect the Merger...................................................................... 67

Section 7.2 Additional Conditions to the Obligations of Forest and Spinco.......................... 68

Section 7.3 Additional Conditions to the Obligations of the Company and Merger Sub................. 68

ARTICLE VIII

TERMINATION, AMENDMENT AND WAIVERS

Section 8.1 Termination............................................................................ 69

Section 8.2 Effect of Termination.................................................................. 71

Section 8.3 Termination Fee; Expenses.............................................................. 71

Section 8.4 Amendment.............................................................................. 72

Section 8.5 Waivers................................................................................ 73

{/TABLE}

iii

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ARTICLE IX

MISCELLANEOUS

Section 9.1 Survival of Representations, Warranties and Agreements; Indemnification................ 73

Section 9.2 Expenses............................................................................... 74

Section 9.3 Notices................................................................................ 74

Section 9.4 Certain Construction Rules............................................................. 75

Section 9.5 Severability........................................................................... 76

Section 9.6 Assignment; Binding Effect............................................................. 76

Section 9.7 No Third Party Beneficiaries........................................................... 76

Section 9.8 Limited Liability...................................................................... 76

Section 9.9 Entire Agreement....................................................................... 77

Section 9.10 Governing Law.......................................................................... 77

Section 9.11 Counterparts........................................................................... 77

Section 9.12 Specific Performance................................................................... 77

Section 9.13 Waiver of Jury Trial................................................................... 77

{/TABLE}

Schedules

Exhibit A - Distribution Agreement

Exhibit B - Initial Officers of the Company

Exhibit C - Certificate of Incorporation of the Company

Exhibit D - Bylaws of the Company

Exhibit E - Relocation and Severance Benefits

Exhibit F - Rule 145 Affiliate Agreement

Exhibit G - Form of Forest Officers' Certificate

Exhibit H - Form of Company Officers' Certificate

{PAGE}

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER, dated as of September 9, 2005, is among

Forest Oil Corporation, a New York corporation ("Forest"), SML Wellhead

Corporation, a Delaware corporation and a wholly owned subsidiary of Forest

("Spinco"), Mariner Energy, Inc., a Delaware corporation (the "Company"), and

MEI Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the

Company ("Merger Sub").

WHEREAS, prior to the Distribution Date (as such term and other

capitalized terms are defined in Article I hereof), and subject to the terms and

conditions set forth in the Distribution Agreement of even date herewith by and

between Forest and Spinco, in the form attached hereto as Exhibit A (the

"Distribution Agreement"), Forest intends to transfer or cause to be transferred

to Spinco all of the Spinco Assets, and Spinco intends to assume all of the

Spinco Liabilities, as contemplated by the Distribution Agreement (such transfer

and assumption collectively, the "Contribution");

WHEREAS, subject to the conditions set forth in the Distribution

Agreement, on the Distribution Date, Forest intends to distribute all of the

issued and outstanding shares of Spinco Common Stock on a pro rata basis to the

holders as of the Record Date (as defined in the Distribution Agreement) of the

outstanding Forest Common Stock (the "Distribution");

WHEREAS, at the Effective Time, the parties intend to effect a merger of

Merger Sub with and into Spinco, with Spinco being the surviving corporation of

the Merger;

WHEREAS, the Board of Directors of the Company (i) has determined that the

Merger is fair to, and in the best interests of, the Company and its

stockholders and has approved this Agreement and the Merger, and (ii) has

recommended the adoption of this Agreement by the stockholders of the Company,

and the Company, as the sole stockholder of Merger Sub, has adopted this

Agreement;

WHEREAS, the Board of Directors of Merger Sub has approved this Agreement

and the transactions contemplated hereby, including the Merger;

WHEREAS, the Board of Directors of Forest (i) has approved this Agreement

and the Distribution Agreement and the transactions contemplated hereby and

thereby, including the Contribution, the Distribution and the Merger, and (ii)

has determined that the Merger is fair to, and in the best interests of, Forest

and its shareholders;

WHEREAS, the Board of Directors of Spinco (i) has determined that the

Merger is fair to, and in the best interests of, Spinco and its stockholder and

has approved this Agreement, and Forest, as the sole stockholder of Spinco, has

adopted this Agreement, and (ii) has approved the Distribution Agreement and the

transactions contemplated hereby and thereby, including the Contribution and the

Distribution; and

WHEREAS, the parties to this Agreement intend that the Contribution and

the Distribution qualify under Sections 368(a) and 355 of the Code,

respectively, and that the Merger qualify as a reorganization under Section

368(a) of the Code, and the parties intend, by executing this Agreement, to

adopt a plan of reorganization within the meaning of Section 368 of the Code;

{PAGE}

NOW, THEREFORE, in consideration of the representations, warranties,

covenants and agreements set forth in this Agreement, and for other good and

valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, the parties, intending to be legally bound hereby, agree as

follows:

ARTICLE I

DEFINITIONS

"2004 Spinco IDC" shall have the meaning specified in Section 6.21.

"Acquisition Proposal" shall have the meaning specified in Section

6.11(g).

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