New Washington Irrigation

Plan of Consolidation

South Kamas Irrigation Company (SCIC) and New Washington Irrigation Company (NWIC), both duly organized non-profits mutual water companies under the laws of Utah wish to consolidate and form a new Utah non-profit mutual water company. The plan of consolidation is as follows:

Section 1 - Name

The name of the consolidated corporation shall be _________ (Corporation).

Section 2 - Duration

The duration of the Corporation shall be perpetual unless terminated sooner in a manner provided by law.

Section 3 - Effect of Consolidation

A. On the effective date of consolidation, the separate existence of SKIC and NIWC shall cease, and they shall be consolidated into a single corporation in accordance with the provisions of this Agreement, then all rights, privileges, and powers of SKIC and NWIC, both of the public and private nature all property, real, personal. and mixed of each of the corporations, all debts due to each of the corporations, and all other choices of action belonging to each of the corporations and all and every other interest of the corporations, shall vest in the Corporation, without further act or deed or other transfer, as effectively as if they were vested in SWIC and NWIC.

B. The Corporation shall have all of the rights, privileges, immunities, and powers, and shall be subject to all of the duties and liabilities of a corporation organized under Utah Code section 16-6a-101 et seq., as amended, Utah Revised Nonprofit Corporation Act (Act).

C. The Corporation shall be responsible and liable for all of the legal liabilities and obligations of SKIC and NWIC. Any existing claim or action or proceeding pending by or against SKIC or NWIC may be prosecuted and defended as if such consolidation had not taken place, and the Corporation may be substituted in its place. Neither the rights of creditors nor any liens upon the property of SKIC or NWIC shall be impaired by such consolidation.

Section 4 - Transfer of Property

A. On the effective date of consolidation, all of the property, easements, rights, privileges, and leases, including water rights and the complete water systems of SKIC and NWIC shall be transferred to and become the property, easements, rights, privileges, leases, water rights and water systems of the Corporation. The officers and boards of directors of SKIC and NWIC shall be authorized to execute all bills of sale, deeds, assignments, and documents of every nature which may be needed to effectuate a full and complete conveyance and transfer of ownership from their respective corporations to Corporation.

B. If at any time, after the effective date of the consolidation, the Corporation shall consider or be advised that any instrument or conveyance or further assurance is necessary in order to evidence the vesting in the Corporation of the title to any of its property or rights, the appropriate officers and directors of SKIC or NWIC are hereby authorized to execute and acknowledge all such instruments, and to do such other acts or things as may be requisite or desirable to carry out the purposes of this Plan of Consolidation.

Section 5 - Assets and Liabilities

The assets and liabilities of SKIC and NWIC shall be taken up and continued on the books of the Corporation at the amounts and at which they are respectively recorded on the books of SKIC and NWIC, appropriately adjusted is deemed necessary to place them on a uniform basis and in accordance with accepted accounting procedures.

Section 6 - Authorized Stock

A. The Corporation may issue ____ shares of common stock. [Par value?]

B. The initial classes of shares and the number of shares to be authorized and issued per class are as follows:

  • CLASS A . . . . Agricultural Irrigation Use, ____ shares.
  • CLASS B . . . . Domestic/Municipal Use, ____ shares.
  • CLASS C . . . . Supplemental Irrigation Water through the Central Utah Project, ____ shares.
  • CLASS D . . . . Carrier Water to Remain in Distribution System upon Conversion of Class A Shares to Domestic Use to Protect Remaining Class A Shareholders, ____ shares.

C. Class A shares represent the shareholder’s right to receive irrigation water through the Company’s irrigation distribution system. One share of Class A stock shall entitle the holder thereof to ____ acre-feet of water in an average year; the quantity of water delivered per share is to be adjusted annually and during the course of any given irrigation season depending upon the available water supply in the discretion of the Board of Directors.

D. Class B Shares represent Class A Shares that have been surrendered to the Company for conversion to domestic/municipal use pursuant to a shareholder-requested change application for water to be diverted from a well or wells and no longer delivered for irrigation use through the Company’s irrigation distribution system. One share of Class B stock shall entitle the holder thereof to one (1.0) acre-feet of water in an average year; the quantity of water delivered per share is to be adjusted annually and during the course of any given irrigation season depending upon the available water supply in the discretion of the Board of Directors. Unless waived by the Board for good cause or until such time as the Company installs a piped, pressurized sprinkler irrigation system, the conversion of Class A shares to Class B shares will require the converting shareholder to convert three Class A shares to three Class D shares for every 10 shares of Class A stock to be converted to 10 Class B shares. The water available under the Class D shares shall remain in the irrigation distribution system to provide the converting shareholder’s proportionate share of carrier water to the irrigation system to avoid impairing the remaining Class A shareholders. Class D shares dedicated to carrier water cannot form the basis of further diversion and beneficial use of that quantity of water and cannot be converted to Class B shares unless and until such time as the Company installs a piped, pressurized irrigation system thereby eliminating the need for carrier water; and subject further to State Engineer approval and the satisfaction of return flow obligations.

E. Class C shares represent supplemental irrigation water subscribed for by a Class A shareholder, which supplemental irrigation water has been made available to the Company by the Central Utah Water Conservancy District. Only Class A shareholders may hold Class C shares and use supplemental irrigation water. If the shareholder ceases to own Class A Shares the shareholder’s Class C shares will be canceled in accordance with the terms and conditions of the subscription contracts and the agreement between the Central Utah Water Conservancy District and Company.

Section 7 - Converstion of Stock in SCIC and NWIC to Corporation Stock

A. To effectuate the conversion of the capital stock of SKIC into stock of the Corporation, all shareholders of SKIC shall surrender their SKIC stock to the Corporation whereupon such SKIC stock shall be cancelled upon SKIC’s records and thereupon such SKIC shareholder shall be entitled to receive ____ shares in the Corporation for each Class A or Class B SKIC stock. A SKIC may convert Class A SKIC stock to Class A stock of Corporation and Class B stock in SKIC for Class B stock in Corporation.

B. To effectuate the conversion of the capital stock of NWIC into stock of the Corporation, all shareholders of NWIC shall surrender their NWIC stock to the Corporation whereupon such NWIC stock shall be cancelled upon NWIC’s records and thereupon such NWIC shareholder shall be entitled to receive ____ shares in the Corporation for each Class A or Class B NWIC stock. A NWIC may convert Class A NWIC stock to Class A stock of Corporation and Class B stock in NWIC for Class B stock in Corporation.

C. The conversion rates set forth in Sections ____ 7A and 7B were calculated by [explain process].

D. Each share of converted Class A or Class B in Corporation stock shall have the same voting right, one vote per Class A and Class B share. Class C and D shares shall not have any vote.

Section 8 - Articles of Incorporation

The articles of incorporation of the Corporation shall be as set forth in Exhibit 1 (Articles).

Section 9 - Procedure for SKIC and NWIC

The Plan of Consolidation shall be adopted by SKIC and NWIC as follows:

A. SKIC and NWIC’s board of directors shall each adopt a resolution approving this proposed Plan of Consolidation and the Articles, and directing that said Plan and Articles be submitted to a vote of the shareholders of each corporation at a special meeting of the shareholders noticed and held for that purpose. Notice of the meeting shall be given in accordance with SKIC and NWIC’s respective articles and bylaws. The proposed Plan of Consolidation and the Articles shall be approved by SWIC and NWIC’s respective shareholders consistent with their respective articles and bylaws and Utah law.

B. Upon such shareholder approval, the Plan of Consolidation shall be executed by SKIC and NWIC and verified by one of the officers of each corporation.

Section 10 — Effective Date of Merger

[insert provision regarding Secretary of State’s acceptance of this plan of consolidation and articles of consolidation, if required]

Section 11 — Restraint on SKIC and NWIC Action Prior to Consolidation

Once SKIC and NWIC’s respective Board of Directors has adopted a resolution approving this proposed Plan of Consolidation, neither corporation shall, without prior written consent of the other:

A. Amend its articles of incorporation or bylaws;

B. Engage in any activity or transaction except in the ordinary course of business; or

C. Issue or sell any shares of its capital stock or seller grant any rights or options with respect thereto.

Section 12 — Abandonment of Consolidation

This Plan of Consolidation may be abandoned and terminated as follows:

A. By resolution of the board of directors of either SKIC or NWIC at any time prior to the adoption of the Plan of Consolidation and Articles by their respective shareholders; or

B. By the mutual consent of SKIC and NWIC, expressed by resolution of their respective board of directors, at any time after the adoption of the Plan of Consolidation in this agreement, but prior to the filing of the articles of consolidation; or

C. By resolution of the board of directors of either SKIC or NWIC at any time after adoption of the Plan of Consolidation but prior to the filing of articles of consolidation in the event that:

  • i. there is then pending any proceeding, in a court or government agency, to enjoin or prohibit the consummation of the consolidation; or
  • ii. an order of a court or any government agency has been entered enjoining or prohibiting the consummation of the consolidation, if the board of directors of that corporation, in its sole judgment, deems the consummation of the consolidation under such circumstances to be contrary to the best interests of that corporation.

Section 13 — Expenses of Consolidation Proceedings

SKIC and NWIC shall each pay their own expenses in negotiating and executing the Plan of Consolidation and the Articles.

Section 14 — Purposes and Powers of the Corporation

A. The purposes and powers of the Corporation and the business for which the Corporation is formed are:

  • i. To own, manage, operate, maintain, repair and replace, construct and reconstruct water diversion, distribution and storage facilities, including, without limitation, canals, ditches, wells, dams, reservoirs, flumes, aqueducts, underground pipelines and all necessary and desired appurtenances thereto, in the County of Summit, State of Utah, for the purpose of supplying water for irrigation, stock watering, domestic and all other beneficial uses and purposes;
  • ii. To own and acquire, by appropriation, purchase, condemnation, lien, lease, contract or otherwise, any and all real and personal property, including, without limitation, water and water rights, water supply contracts with water conservancy districts for use of Reclamation Project Water, and other needful water, water rights, water stock and sources of water supply used in connection with the said water diversion, distribution and storage facilities and the water supply flowing in and through the same and to supervise, regulate, control, divide and distribute said water and water supply to shareholders of the Corporation; to sell, lease and otherwise dispose of the same; and in general to do any and all things necessary and proper to be done in carrying out the business of a mutual irrigation Corporation under Utah law;
  • iii. To issue bonds and other forms of indebtedness end to otherwise make and perform contracts of any kind and description, including contracts with the United States, the State of Utah, and other governmental special districts and entities, pursuant to which the Corporation shall be authorized to sell, lease, exchange, mortgage, pledge, or otherwise dispose of all or substantially all of the assets of the Corporation, as and for security for indebtedness, or otherwise, for the acquisition of real and personal property, including, without limitation, water, water rights and water stock, and the use, joint development of and/or improvements to all water diversion, distribution and storage facilities, and in carrying on its business, or for the purpose of attaining or furthering any of its objectives;
  • iv. To apportion any loss of all or any portion of the water rights of Corporation due to abandonment or forfeiture for non-use to any and all shareholders whose failure to make beneficial use of the water caused the loss, forfeiture or partial forfeiture of the water rights of the Corporation;
  • v. To levy assessments on its stock for any payments that might become delinquent under any such assessment or contract with either, or any of the aforenamed authorities or agencies.
  • vi. To do any and all acts and things, and to have and exercise all rights and powers from time-to-time granted to a non-profit corporation by law, including, without limitation, those powers described in the Act.

B. The Corporation is organized as a non-profit, private irrigation company engaged in distributing water only to its shareholders and, therefore, is not a public utility as defined by law and is not subject to regulation, by the Utah Public Service Commission.

C. None of the objects of the Corporation shall be for the pecuniary profit of its members, directors or officers, and no part of the income of the Corporation shall inure to the benefit of or otherwise be distributed to any shareholder or individual. No loan shall be made by the Corporation to any of its directors, officers or shareholder.

D. The purposes and powers enumerated herein shall not be construed as limiting or restricting in any manner the purposes and powers of the Corporation as conferred by the laws of the State of Utah. The Corporation shall be authorized to exercise and enjoy all the powers, rights, and privileges conferred upon nonprofit corporation by the laws of the State of Utah. The Corporation shall always have such incidental powers as may be connected with or related to any specific purpose or power enumerated herein.

E. No substantial part of the activities of the Corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the Corporation shall not participate in, or intervene in (including the publishing or distribution of statements) any political’ campaign on behalf of any candidate for public office except as authorized under the Code. Notwithstanding any other provision of these Articles, the Corporation shall not carry on any other activities not permitted to be carried on (a) by a corporation exempt from federal income tax under the Code, as amended or supplemented, or (b) by a corporation, contributions to which are deductible under Section 170(c)(2) of the Internal Revenue Code, as amended or supplemented.

Section 15 — Members

The members of the Corporation shall be the shareholders of the Corporation, and membership shall be acquired only by the acquisition of stock in the Corporation.

Section 16 - Board of Directors

A. The powers of the Corporation shall be exercised by a Board of five (5) Directors who shall be members of the Corporation, as on Corporation’s records. The Board shall manage and direct the business and affairs of the Corporation. Each director shall serve a term of three years. The board shall establish staggered terms for the board members so that no more than three board members are subject to election in any one calendar year.

B. Three (3) members of the Board of Directors shall constitute a quorum for the transaction of business at any meeting for the Board of Directors, and such quorum shall have power and authority to transact the business of the Corporation and exercise the corporate powers thereof.

Section 17 — Officers

The Corporation’s officers shall be elected by the Board, and shall consist of a president, vice-president, secretary, and treasurer. Those persons to serve in the office of president and vice-president shall be elected from among the membership of the Board. Those persons to serve in the office of secretary and treasurer may, but need not be, members of the Board. One person may hold the office of secretary and treasurer. The term of office shall be one year.

Section 18 — Bylaws

The directors may adopt and amend bylaws and make such rules and regulations as four (4) of the five (5) of them may approve. The Bylaws must be consistent with these Articles or the laws of the State of Utah.

Section 19 — Assessments

A. The Corporation’s stock is assessable in such amounts, at such times, in such manner, and for purposes consistent with the Corporation’s purposes as the Board from time to time shall determine. Each member of the Corporation shall be liable for the assessment.

B. Each share of stock shall be assessable pursuant to the Utah Share Assessment Act, Utah Code Ann. §§16-101 to -312 as amended, for the purpose of raising funds to accomplish the purposes of the Corporation and to pay its debts, liabilities, or obligations. The Board shall have the discretion to levy assessments on other than a pro rata basis and may vary the amounts of the assessments among the members; such assessments must be equitable but need not be equal among the members.

C. In the event a member is in default of payment on an assessment, the corporation may, after reasonable notice to the delinquent member, take any reasonable action necessary to enforce payment of the delinquent assessment, including but not limited to:

  1. Impose a late charge, penalty, or interest;
  2. Suspend one (1) or more benefits of share ownership, including the right to vote, to transfer shares, or the delivery of water;
  3. Sell the shares on which payment is delinquent at a limited public auction in conformance with the requirements of the Utah Share Assessment Act; 1. Cancel the delinquent Share and convert it to treasury stock;
  4. Commencing legal action for specific performance to collect the unpaid assessment, including costs and reasonable attorney’s fees; and
  5. Any other enforcement method adopted by the Board or set forth in the Bylaws and consistent with Corporation’s Articles.

D. No delay by the Corporation in exercising any right or single partial exercise of any such right under this Section shall operate as a waiver thereof. Enforcement by the Corporation of any right hereunder shall not constitute any election by it of remedies so as to preclude the exercise of any other remedy available to it.

Section 20 — Stockholder Liability

The private property of the Corporation’s stockholders or members of this Corporation shall not be held liable or taken for the debts of obligations of this corporation.

VERIFICATION

The undersigned, as directors of South Kamas Irrigation Company, hereby certify that the above Plan of Consolidation was adopted by a vote of ____ in favor and ____ in opposition at a special meeting of the members, where a quorum was present, called for the purpose of adopting the Plan of Consolidation, on [date] at [time] in [place], Utah.

________________________ [Name], President

________________________ [Name], Vice President

________________________ [Name]

________________________ [Name]

________________________ [Name], Secretary

VERIFICATION

The undersigned, as directors of New Washington Irrigation Company, hereby certify that the above Plan of Consolidation was adopted by a vote of ____ in favor and ____ in opposition at a special meeting of the members, where a quorum was present, called for the purpose of adopting the Plan of Consolidation, held on [date] at [time] in [place], Utah.

________________________ [Name], President

________________________ [Name], Vice President

________________________ [Name]

________________________ [Name]

________________________ [Name], Secretary