PLAN OF MERGER OF PRESTON RIVERDALE AND MINK CREEK CANAL COMPANY, PRESTON & WHITNEY RESERVOIR COMPANY, AND PRESTON-WHITNEY IRRIGATION COMPANY

Transcription

1 PLAN OF MERGER OF PRESTON RIVERDALE AND MINK CREEK CANAL, PRESTON & WHITNEY RESERVOIR, AND PRESTON-WHITNEY IRRIGATION 1. The names of each nonprofit company planning to merge are as follows: Preston Riverdale and Mink Creek Canal Company Preston & Whitney Reservoir Company Preston-Whitney Irrigation Company The name of the surviving nonprofit company shall be changed to the CONSOLIDATED IRRIGATION. 2. The terms and conditions of the merger are as follows: (a) It is understood that Preston Riverdale and Mink Creek Canal Company, Preston & Whitney Reservoir Company, and Preston-Whitney Irrigation Company were each originally organized for the purpose of obtaining and owning water rights, and owning and operating their respective lateral canals and reservoirs for conveyance of water diverted pursuant to their water rights. The purpose of this merger is to provide for a single operating company to hold all of the water rights formerly held by each respective company, as well as to own and operate the diversion headings, canals, pipelines, reservoirs, and other attendant structures and items necessary to provide irrigation water previously owned by all of the companies. (b) All water rights, easements, and conveyance rights formerly held by Preston Riverdale and Mink Creek Canal Company, the Preston & Whitney Reservoir Company, and the Preston-Whitney Irrigation Company, together with all attendant diversion and delivery structures and facilities and any and all other real or personal property of every name, nature or description shall be conveyed therefrom by good and sufficient quitclaim deed for real property and good and sufficient assignments or bills of sale for personal property to the surviving company, Consolidated Irrigation Company. (c) All outstanding shares of stock of each company shall be canceled, and, to the extent practicable, the certificates representing such stock shall be collected and delivered to the secretary of the surviving company. The surviving company shall issue a new certificate to the former stockholders of the Preston Riverdale and Mink Creek Canal Company, Preston & 1 PLAN OF MERGER OF PRESTON RIVERDALE AND MINK CREEK CANAL, PRESTON & WHITNEY RESERVOIR, AND PRESTON-WHITNEY IRRIGATION

2 Whitney Reservoir Company, and Preston-Whitney Irrigation Company in the following classes and proportions: 1. Preston Riverdale and Mink Creek Canal Company: 2.5 shares of Class B stock in Consolidated Irrigation Company for every 1 share of Preston Riverdale and Mink Creek Canal Company stock formerly held by each such stockholder. 2. Preston & Whitney Reservoir Company: 1 share of Class C stock in Consolidated Irrigation Company for every 5 shares of Preston & Whitney Reservoir Company stock formerly held by each such stockholder. 3. Preston-Whitney Irrigation Company: 1 share of Class D stock in Consolidated Irrigation Company for every 1 share of Preston-Whitney Irrigation Company stock formerly held by each such stockholder. All stock classes shall be treated equally with regard to water allocation made by the surviving company. Regarding assessment amounts, Class B, C, and D stock shall be assessed yearly based on a determination of operation and maintenance costs, as well as an additional amount necessary to retire the respective debts of each former company. Once the debt of each former company is satisfied, Class B, C, and D stock shall be surrendered to the Consolidated Irrigation Company, and a Class A stock certificate shall be issued for each share of Class B, C, and D stock surrendered as further provided in the bylaws of the Consolidated Irrigation Company. As further consideration for the above stock allocation, Preston-Whitney Irrigation Company has historically rented 1300 shares of treasury stock to its stockholders, and Preston- Whitney Irrigation Company shall receive an allocation of Class D stock for such rental shares. These shares may continue to be rented, with the rental revenue for such shares allocated to reduce the debt of the former Preston-Whitney Irrigation Company or to be used to pay operation and maintenance expenses of said former entity. Additionally, should the board members of the Consolidated Irrigation Company who hold Class D stock elect to sell the rental shares, the revenue from such sale shall be used to reduce the debt of the former Preston-Whitney Irrigation Company or be used to pay operation and maintenance expenses of said former entity. Notwithstanding the above, in the event the rental stock is not sold within fifteen (15) years of date of merger, the rental stock shall become Class A stock and become treasury stock of the Consolidated Irrigation Company. (d) Should the above described issuance of stock result in any stockholder receiving an amount of stock with a fraction of one (1) share, such fractional share shall either be relinquished (purchased) by the Company, or the stockholder must purchase from the Company a fractional amount in order to possess one (1) complete share. For purposes of eliminating fractional shares only, the value of one (1) whole share shall be set at $600.00, with the value of 2 PLAN OF MERGER OF PRESTON RIVERDALE AND MINK CREEK CANAL, PRESTON & WHITNEY RESERVOIR, AND PRESTON-WHITNEY IRRIGATION

3 either the purchase or sale of fractional share based upon a formula where the amount to be relinquished by the stockholder or purchased by the Company is multiplied by $ (e) Notwithstanding the above, once a vote on the proposed merger occurs, because of the terms of existing debt documents for debt owed to the United States Bureau of Reclamation, Preston Riverdale and Mink Creek Canal Company must receive approval from the United States Bureau of Reclamation to finalize the merger. The voting upon the merger proposal shall be expressly contingent upon formal approval for the merger of the Preston Riverdale and Mink Creek Canal Company by the United States Bureau of Reclamation, which approval is anticipated to come after the vote of merger. In the event the United States Bureau of Reclamation does not approve of the merger, the merger vote shall be null and void and of no further effect. (f) Provided the United States Bureau of Reclamation approves of the merger, the articles of incorporation of each of the merged companies shall be revoked, and the following articles of merger and articles of the surviving nonprofit company, Consolidated Irrigation Company, substituted therefor: ARTICLES OF MERGER FOR PRESTON RIVERDALE AND MINK CREEK CANAL, PRESTON & WHITNEY RESERVOIR, AND PRESTON- WHITNEY IRRIGATION AND AMENDED AND RESTATED ARTICLES OF INCORPORATION ARTICLE I. A plan of merger was adopted by each board of directors of the following companies on the date set opposite the name of each company: Preston Riverdale and Mink Creek Canal Company Date: April 20, 2011 Preston & Whitney Reservoir Company Date: April 28, 2011 Preston-Whitney Irrigation Company Date: April 19, 2011 Thereafter, and pursuant to notice as required by Idaho Code (4) and (6) and other applicable Idaho law, a special meeting of the stockholders of each such company was held on the dates shown on the following chart and the plan of merger was approved by a vote of more than 2/3 of the stock represented at each such meeting for Preston & Whitney Reservoir Company and Preston-Whitney Irrigation Company. For Preston Riverdale and Mink Creek Canal Company, 2/3 of its subscribed stock voted to approve the merger, as required by its bylaws. The following chart shows the date of the special meeting of stockholders, the number of outstanding shares entitled to vote at each such meeting, the number of shares actually 1 By way of example, if a stockholder has 4/10 of a share, then he will either need to relinquish it to the Company for $ (.4 X $600.00), or purchase 6/10 of a share for $ (.6 X $600.00). 3 PLAN OF MERGER OF PRESTON RIVERDALE AND MINK CREEK CANAL, PRESTON & WHITNEY RESERVOIR, AND PRESTON-WHITNEY IRRIGATION

4 represented in person or by proxy at each such meeting, and the number of shares voted in favor of the merger and the number of shares voted against the merger: Name Date of Meeting No. of Outstanding Shares No. of Shares Represented at Meeting No. of Shares Voted in Favor No. of Shares Voted Against Preston Riverdale and Mink Creek Canal Company Preston & Whitney Reservoir Company Preston-Whitney Irrigation Company June 1, , June 1, , June 1, , PLAN OF MERGER OF PRESTON RIVERDALE AND MINK CREEK CANAL, PRESTON & WHITNEY RESERVOIR, AND PRESTON-WHITNEY IRRIGATION

5 ARTICLES OF INCORPORATION OF THE CONSOLIDATED IRRIGATION ARTICLE I. The name of the surviving nonprofit corporation of the merged Preston Riverdale and Mink Creek Canal Company, Preston & Whitney Reservoir Company, and Preston-Whitney Irrigation Company shall be the CONSOLIDATED IRRIGATION. ARTICLE II. This company shall have perpetual existence. ARTICLE III. There shall be authorized for issuance by the company 50,000 shares of Class A capital stock, without par value, which Class A stock shall represent the stock of the company without any debt from the former entities. In that regard, prior to the issuance of any Class A stock, 9,800 shares of Class B stock shall be authorized for issuance to the former stockholders of the Preston Riverdale and Mink Creek Canal Company, 1,600 shares of Class C stock shall be authorized for issuance to the former stockholders of the Preston & Whitney Reservoir Company, and 29,500 shares of Class D stock shall be authorized for issuance to the former stockholders of the Preston-Whitney Irrigation Company. Upon retirement of each former company s debt, the stock of each such entity (Class B, C, or D) shall thereafter be exchanged for shares of Class A stock. The common capital stock of the company shall be assessable for payment of the obligations of the company in the manner and to the extent provided in the bylaws of the company, and as said bylaws may from time to time be amended. ARTICLE IV. The initial registered office of the company shall be in Preston, Franklin County, Idaho. The registered agent of the company shall hereafter be the duly elected, qualified and serving secretary of the company, and the address of the company s registered office shall be the address of said secretary unless the directors otherwise provide in writing and give such notice as may be required by law. The name and address of said secretary is Maxine Waddoups, 33 S. 1 st E. Preston, Idaho Dated Registered Agent ARTICLE V. The names and addresses of the initial directors of the surviving company, Consolidated Irrigation Company, are as follows: NAME ADDRESS 5 PLAN OF MERGER OF PRESTON RIVERDALE AND MINK CREEK CANAL, PRESTON & WHITNEY RESERVOIR, AND PRESTON-WHITNEY IRRIGATION

6 1. Lyle W. Porter 1447 E. 800 North, Preston, Idaho Brian Jensen 3818 S. 800 West, Preston, Idaho R. Carl Swainston 135 N. 8 th East, Preston, Idaho Jay Ransbottom E., Preston, ID Kirk Iverson 2724 S West, Preston, Idaho Ray S. Bennett 1419 N. State, Preston, Idaho W. Earl Fellows 1022 N West, Preston, Idaho Kent B. Egley 4803 E. Glencoe Road, Preston, Idaho Edward C. Moser 387 S E., Preston, ID Jeffrey T. Hobbs 24 N. 1 st E., Franklin, ID The number of directors of the company and their election, terms, powers and responsibilities shall be as provided in the bylaws of the company, and as said bylaws may from time to time be amended. ARTICLE VI. The purposes for which the initial company was formed, and for which the surviving company shall continue to exist, is the acquisition and holding of water rights for the irrigation of the lands of the stockholders and the owning and operating of a diversion facility and a system of canals, reservoirs, pipelines, and laterals with attendant structures and equipment to divert waters from the public source of supply pursuant to its water rights and deliver the same to the private facilities, farms, homes, churches, schools, and municipalities of its stockholders. The company shall further transact any or all lawful business in connection with such purposes or in any manner related thereto which may aid or assist in the accomplishment of such purposes, as well as any or all other lawful business for which companies may be incorporated under the laws of the State of Idaho. ARTICLE VII. The capital stock of the company may only be transferred (1) in connection with a transaction involving title to the real property to which that portion of the water and water conveyance rights of the company represented by such stock is appurtenant, or (2) in connection with the sale of stock only (without an underlying real property transaction) in the manner and subject to the exceptions described in the bylaws, and as said bylaws may from time to time be amended. ARTICLE VIII. The respective interests of the stockholders and the assets and savings of the company shall be in the same proportion as their respective stock ownership, which shall be determined in proportion to their business with the company. No funds shall be retained in excess of those needed to meet current expenses for such purposes as retiring indebtedness incurred and acquiring assets, expanding the services of the company or maintaining reserves for necessary purposes. 6 PLAN OF MERGER OF PRESTON RIVERDALE AND MINK CREEK CANAL, PRESTON & WHITNEY RESERVOIR, AND PRESTON-WHITNEY IRRIGATION

7 ARTICLE IX. The company shall maintain such records as are necessary to determine at any time each member s rights and interests in the assets of the company. ARTICLE X. Except to the extent provided in Article VII and in the bylaws, a former stockholder s rights and interests shall not be forfeited upon withdrawal or termination of membership. ARTICLE XI. Upon dissolution, the assets of the company, after the payment of all debts and obligations, shall be distributed to all stockholders and former stockholders in proportion to the business done with the company, in so far as practicable. Any water rights or water conveyance rights held by the company shall be distributed to the person or persons to whose lands such water rights or conveyance rights are then appurtenant. ARTICLE XII. No director of the company shall be personally liable to the company or its stockholders for monetary damages, except: a. for breach of a director s duty of loyalty to the company or its stockholders; b. for acts or omissions not in good faith or which involve the intentional misconduct or a knowing violation of the law; c. for liability under of the Idaho Code; d. for any transaction from which the director derived an improper personal benefit. ARTICLE XIII. Those stockholders present in person or by proxy at an annual or special stockholders meeting shall constitute a quorum for purposes of transacting any business to come before the meeting. ARTICLE XIV. The company is and shall continue to be a nonprofit operating company as the same is described in and for the purposes of the provisions of Idaho Code, Title 42, Chapters 22 and 24, and shall have and exercise all the rights, powers and privileges set forth in said chapters, 7 PLAN OF MERGER OF PRESTON RIVERDALE AND MINK CREEK CANAL, PRESTON & WHITNEY RESERVOIR, AND PRESTON-WHITNEY IRRIGATION

8 including, without limitation, the right to prescribe in its bylaws the manner in which the powers of the company, given by law, shall be exercised. The rights, powers and privileges created or granted by law and these articles of incorporation shall vest in and be held and exercised by the stockholders of the company except in so far as they may be expressly delegated to the directors by the bylaws of the company. The above and foregoing articles of merger and restated and amended articles of incorporation of Consolidated Irrigation Company shall become effective upon the filing of these articles. Dated this day of, Ray Bennett President, Preston Riverdale and Mink Creek Canal Company Attest: Secretary Jesse L. Johnson President, Preston & Whitney Reservoir Company Attest: Secretary Lyle W. Porter President, Preston-Whitney Irrigation Company Attest: Secretary C:\Documents and Settings\Rob Harris\Desktop\Final Merger Documents\Merger Plan.May.12.doc:kmc 8 PLAN OF MERGER OF PRESTON RIVERDALE AND MINK CREEK CANAL, PRESTON & WHITNEY RESERVOIR, AND PRESTON-WHITNEY IRRIGATION