2.2.0.7 false Apache Merger 0215 - Disclosure - Apache Merger true false false false 1 USD false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 $ 2 Apache Merger [Abstract] 0 me_CompanyMergerAbstract me false na duration Company Merger. false false false false false true false false false false false false 1 false false false false 0 0 false false false xbrli:stringItemType string Company Merger. false 3 Apache Merger 1 me_CompanyMergerTextBlock me false na duration Merger with Apache Corporation disclosure. false false false false false false false false false false false verboselabel false 1 false false false false 0 0   <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>15. Apache Merger</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     On April 15, 2010, Mariner and Apache Corporation, a Delaware corporation (“Apache”), announced that they entered into a definitive agreement pursuant to which Apache will acquire Mariner in a stock and cash transaction. The Agreement and Plan of Merger dated April 14, 2010 (the “Merger Agreement”), by and among Apache, Mariner and ZMZ Acquisitions LLC, a Delaware limited liability company and wholly owned subsidiary of Apache (“Merger Sub”), contemplates a merger (the “Merger”) whereby Mariner will be merged with and into Merger Sub, with Merger Sub surviving the Merger as a wholly owned subsidiary of Apache. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The total amount of cash and shares of Apache common stock that will be paid and issued, respectively, pursuant to the Merger Agreement is fixed, and Mariner stockholders will be entitled to receive (on an aggregate basis) 0.17043 of a share of Apache common stock, par value $0.625 per share, and $7.80 in cash for each share of Mariner common stock (the “Mixed Consideration”). Mariner stockholders have the right to elect to receive all cash ($26.00 per share), all Apache common stock (0.24347 of a share of Apache common stock) or the Mixed Consideration, subject to proration procedures as provided in the Merger Agreement. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Upon completion of the Merger, each outstanding option to purchase Mariner common stock will be converted into a fully vested option to purchase 0.24347 of a share of Apache common stock. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In addition, each outstanding share of Mariner restricted stock (other than restricted stock granted pursuant to Mariner’s 2008 Long-Term Performance-Based Restricted Stock Program) that is not subject to an unsatisfied price or other condition and that has not lapsed will vest and each holder will have the opportunity to elect the form of consideration as described above. Forty percent of the outstanding shares of Mariner restricted stock granted pursuant to its 2008 Long-Term Performance-Based Restricted Stock Program will vest and each holder will have the opportunity to elect the form of consideration as described above, and the remaining portion of such shares of Mariner restricted stock will be cancelled. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Merger Agreement has been approved by the boards of directors of Apache, Mariner, and Merger Sub. The completion of the Merger is subject to certain conditions, including: (i) the adoption of the Merger Agreement by the stockholders of Mariner; (ii) subject to certain materiality exceptions, the accuracy of the representations and warranties made by Apache and Mariner; (iii) the effectiveness of a registration statement on Form S-4 that will be filed by Apache for the issuance of its common stock in the Merger, and the approval of the listing of these shares on the New York Stock Exchange; (iv) the termination or expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; (v) the delivery of customary opinions from counsel to Apache and Mariner that the Merger will be treated as a tax-free reorganization for U.S. federal income tax purposes; (vi) compliance by Apache and Mariner with their respective obligations under the Merger Agreement; and (vii) the absence of legal impediments prohibiting the Merger. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Merger Agreement also contains customary representations and warranties that the parties have made to each other as of specific dates. Apache and Mariner also have each agreed to certain covenants in the Merger Agreement. Among other covenants, Mariner has agreed, subject to certain exceptions, not to initiate, solicit, negotiate, provide information in furtherance of, approve, recommend or enter into an Acquisition Proposal (as defined in the Merger Agreement). </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The Merger Agreement contains certain termination rights for both Apache and Mariner, including if the Merger is not completed by January 31, 2011. In the event of a termination of the Merger Agreement under certain circumstances, Mariner may be required to pay to Apache a termination fee of $67.0 million. In certain circumstances involving the termination of the Merger Agreement, one of Apache or Mariner will be obligated to reimburse the other’s expenses incurred in connection with the transactions contemplated by the Merger Agreement in an aggregate amount not to exceed $7.5 million. Any reimbursement of expenses by Mariner to Apache will reduce the amount of any termination fee paid by Mariner to Apache. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In connection with the Merger Agreement, Mariner and Continental Stock Transfer & Trust Company (the “Rights Agent”), entered into an Amendment to Rights Agreement, dated as of April 14, 2010 (the “Amendment”), to the Rights Agreement dated as of October 12, 2008 (the “Rights Agreement”), between Mariner and the Rights Agent, in connection with the execution of the Merger Agreement. Undefined capitalized terms used in this paragraph have the meaning ascribed to them in the Rights Agreement. The Amendment provides that none of (i) the announcement of the Merger, (ii) the execution and delivery of the Merger Agreement, (iii) the conversion of shares of Mariner common stock into the right to receive the Merger Consideration (as defined in the Merger Agreement) or (iv) the consummation of the Merger or any other transaction contemplated by the Merger Agreement will cause (1) Apache, Merger Sub or any of their Affiliates or Associates to become an Acquiring Person, or (2) the occurrence of a Flip-In Event, a Flip-Over Event, a Distribution Date or a Stock Acquisition Date under the Rights Agreement. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Subsequent to the announcement of the merger with Apache, two stockholder lawsuits styled as class actions were commenced on behalf of Mariner stockholders challenging the merger. <i>City of Livonia Employees’ Retirement System v. Mariner Energy, Inc., et al</i>, Cause No. 2010-24355, was filed in the 334th Judicial District Court of Harris County, Texas against Mariner and its directors. Plaintiff alleges that the Mariner directors breached their fiduciary duties by agreeing to sell the company through an unfair process and at an unfair price, and that Mariner aided and abetted those breaches of fiduciary duties. Plaintiff seeks to enjoin the transaction and to be awarded attorney’s fees. <i>Southeastern Pennsylvania Transportation Authority v. Scott D. Josey, et al</i>, cause No. 5427-VCP, was filed in the Court of Chancery of the State of Delaware against Mariner, its directors, certain Mariner officers, Apache and Merger Sub. Plaintiff alleges that the Mariner directors breached their fiduciary duties by agreeing to sell the company through an unfair process and at an unfair price, and by agreeing to the vesting of certain restricted stock held by Mariner management. Plaintiff also alleges that Apache and Merger Sub aided and abetted in those breaches of fiduciary duties. Plaintiff seeks to enjoin the merger and to be awarded attorney’s fees. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     On August 1, 2010, the parties to the Delaware action entered into a memorandum of understanding, which, when reduced to a settlement agreement, is intended to be a final resolution of that action. Also on August 1, 2010, the parties to the Texas action agreed to be bound by the memorandum of understanding with respect to that action. In connection with the settlement, and in exchange for the releases described below, Apache and Mariner agreed to, and on August 2, 2010 Apache, Mariner and Merger Sub did, amend the Merger Agreement to eliminate the termination fee in the event that Mariner terminates the Merger Agreement in order to enter into a “superior proposal” with another party and to make certain additional disclosures in the proxy statement/prospectus for the transaction filed with the Securities and Exchange Commission. Additionally, in the event that any proceedings regarding appraisal rights under Section 262 of the Delaware General Corporation Law are commenced following the merger, Apache and Mariner have waived and will not present any argument that shares of Mariner restricted stock granted pursuant to Mariner’s 2008 Long-Term Performance-Based Restricted Stock Program will be counted in determining the total number of Mariner shares outstanding in such proceeding. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Subject to the completion of agreed-upon confirmatory discovery, the parties will negotiate in good faith to execute a settlement agreement to present to the Court of Chancery of the State of Delaware. Pursuant to the settlement, the Delaware action will be dismissed with prejudice on the merits, the plaintiffs in the Texas action will voluntarily dismiss that action with prejudice, and all defendants will be released from any and all claims relating to, among other things, the merger, the Merger Agreement and any disclosures made in connection therewith. The settlement is subject to customary conditions, including consummation of the merger, completion of certain confirmatory discovery, class certification, and final approval by the Court of Chancery of the State of Delaware. The settlement will not affect the form or amount of the consideration to be received by Mariner stockholders in the merger. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The defendants have denied and continue to deny any wrongdoing or liability with respect to all claims, events, and transactions complained of in these actions or that they have engaged in any wrongdoing. The defendants entered into the settlement to eliminate the uncertainty, burden, risk, expense and distraction of further litigation. </div> </div>  <!-- Begin Block Tagged Note false false false us-types:textBlockItemType textblock Merger with Apache Corporation disclosure. No authoritative reference available. false 1 2 false UnKnown UnKnown UnKnown false true