Exhibit 2.1
THIS AGREEMENT OF MERGER (this "Agreement") is made as of
June 25, 1998 by and among SOUTHERN CALIFORNIA WATER COMPANY, a
California corporation ("SCW"), SCW ACQUISITION CORP., a
California corporation ("MergeCo"), and AMERICAN STATES WATER
COMPANY, ("HoldingCo"), a California corporation, with reference
to the following facts:
A. SCW has authorized capital consisting of (i) 30,000,000
shares of Common Stock, with par value of $2.50 per
share ("SCW Common Stock"), of which 8,957,671 shares
have been issued and are outstanding; (ii) 83,200
shares of Preferred Stock (the "SCW Preferred Stock"),
with par value of $25.00 per share, of which 32,000
shares of the 4% Series have been issued and are
outstanding, 32,000 shares of the 4 1/4% Series have
been issued and are outstanding, and 19,200 of the 5%
Series have been issued and are outstanding; and (iii)
150,000 shares of Preferred Stock, with a Par Value of
$100 per share, none of which have been issued.
B. MergeCo has authorized capital consisting of 1,000
shares of Common Stock, with no par value per share
("MergeCo Common Stock"), 100 shares of which have been
issued and are outstanding and are beneficially
owned of record by HoldingCo.
C. HoldingCo has authorized capital consisting of (i)
30,000,000 shares of Common Stock, no par value and a
stated value of $2.50 per share ("HoldingCo Common
Stock"), of which 100 shares are issued and
outstanding and beneficially owned of record by SCW,
(ii) 83,200 shares of Preferred Stock (the "HoldingCo
Preferred Stock"), with par value of $25.00 per share,
of which 32,000 shares are of the 4% Series, 32,000
shares are of the 4 1/4% Series, and 19,200 shares are
of the 5% Series, and none of which shares have been
issued or are outstanding; and (iii) 150,000 shares of
New Preferred Stock, with no par value and a stated
value of $100 per share, none of which have been issued
or are outstanding.
D. The Boards of Directors of the respective parties
hereto deem it advisable to merge MergeCo with and into
SCW in accordance with the California General
Corporation Law (the "CGCL") and this Agreement for
the purpose of establishing HoldingCo as the parent
corporation of SCW in a transaction intended to qualify
as a reorganization within the meaning of Section 368
of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the premises and
agreements contained herein, the parties agree that (i) MergeCo
shall be merged with and into SCW, (ii) SCW shall be the
corporation surviving such merger, and (iii) the terms and
conditions of such merger, the mode of carrying it into effect,
and the manner of converting and exchanging shares of capital
stock shall be as follows:
ARTICLE 1
THE MERGER
1.1 The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with
the CGCL, MergeCo shall be merged (the "Merger") with and into
SCW at the Effective Time (as defined below). Following the
Merger, the separate corporate existence of MergeCo shall cease
and SCW shall continue as the surviving corporation (SCW, as the
surviving corporation, being sometimes referred to herein as the
"Surviving Corporation"), and shall succeed to and assume all the
rights and obligations of SCW and of MergeCo in accordance with
the CGCL.
1.2 Closing. The closing of the Merger shall take
place at 10:00 a.m. on a date specified by the parties (the
"Closing Date"), at the offices of O'Melveny & Xxxxx LLP, 000
Xxxxx Xxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
1.3 Effective Time. Subject to the provisions of
this Agreement, on the Closing Date the parties shall file with
the California Secretary of State (i) a copy of this Agreement
of Merger, (ii) an officer's certificate for each of MergeCo and
SCW, and (iii) a certificate of satisfaction of the California
Franchise Tax Board for MergeCo, all as required by Section 1103
of the CGCL (such documents, the "Merger Documents"), and shall
make all other filings or recordings required under the CGCL. The
Merger shall become effective at 12:01 a.m., July 1, 1998 (such
date and time being the "Effective Time").
1.4 Effects of the Merger. The Merger shall have the
effects set forth in Section 1107 of the CGCL and all other
effects specified in the applicable provisions of the CGCL.
ARTICLE 2
TERMS OF CONVERSION AND EXCHANGE OF SHARES
At the Effective Time:
2.1 SCW Common Stock. Each share of SCW Common Stock
or fraction thereof issued and outstanding immediately prior to
the Merger shall be automatically changed and converted into one
share of HoldingCo Common Stock or fraction thereof, which shall
thereupon be issued and fully-paid and non-assessable.
2.2 SCW Preferred Stock. Each share of each series
of SCW Preferred Stock issued and outstanding immediately prior
to the Merger shall be automatically changed and converted into
the same number of shares of the same series of HoldingCo
Preferred Stock, which shall thereupon be issued and fully-paid
and non-assessable.
2.3 MergeCo Shares. The shares of MergeCo Common
Stock issued and outstanding immediately prior to the Merger
shall be automatically changed and converted into all of the
issued and outstanding shares of Common Stock of the Surviving
Corporation, which shall thereupon be issued and fully-paid and
non-assessable, with the effect that the number of issued and
outstanding shares of Common Stock of the Surviving Corporation
shall be the same as the number of issued and outstanding shares
of MergeCo Common Stock immediately prior to the Effective Time.
2.4 HoldingCo Shares. Each share of HoldingCo Common
Stock owned or held by SCW immediately prior to the Merger shall
be canceled.
ARTICLE 3
ARTICLES OF INCORPORATION AND BYLAWS
3.1 Articles of Incorporation. Upon the Effective
Time and until amended or modified in accordance therewith or
pursuant to applicable law, the articles of incorporation set
forth as Appendix A hereto shall be the articles of incorporation
of Surviving Corporation.
3.2 Bylaws. Upon the Effective Time and until
amended or modified in accordance therewith pursuant to
applicable law, the bylaws of SCW in effect on the effective time
shall be the bylaws of Surviving Corporation.
ARTICLE 4
DIRECTORS AND OFFICERS
4.1 Directors and Officers. The persons who are
directors and officers of SCW immediately prior to the Merger
shall continue as directors and officers, respectively, of the
Surviving Corporation and shall continue to hold office as
provided in the Bylaws of the Surviving Corporation. If, at or
following the Effective Time, a vacancy shall exist in the
Board of Directors or in the position of any officer of the
Surviving Corporation, such vacancy may be filled in the manner
provided in the Bylaws of the Surviving Corporation.
ARTICLE 5
STOCK CERTIFICATES
5.1 Pre-Merger SCW Common Share Certificates and SCW
Preferred Shares Certificates. Following the Effective Time, each
holder of an outstanding certificate or certificates theretofore
representing SCW Common Shares or SCW Preferred Shares, as the
case may be, may, but shall not be required to, surrender the
same to HoldingCo for cancellation or transfer, and thereupon
each such holder or transferee will be entitled to receive a
certificate or certificates representing the same number of
shares of Holding Common Shares or series of HoldingCo Preferred
Shares, as the case may be, as the SCW Common Shares or series of
SCW Preferred Shares previously represented by the stock
certificate(s) so surrendered.
5.2 Outstanding Certificates. Until surrendered or
presented for transfer in accordance with Section 5.1 above, each
outstanding stock certificate which, prior to the Effective Time,
represented SCW Common Shares or a series of SCW Preferred
Shares, as the case may be, shall be deemed and treated for all
corporate purposes to represent the ownership of the same number
of shares of HoldingCo Common Shares or series of HoldingCo
Preferred Shares, as the case my be, as though such surrender or
transfer and exchange and taken place.
5.3 SCW Stock Transfer Books. The stock transfer
books for SCW Common Shares and each series of SCW Preferred
Shares shall be deemed to be closed at the Effective Time such
that no transfer of SCW Common Shares or any series of SCW
Preferred Shares shall thereafter be made on such books.
5.4 Post-Merger Rights of Holders. Following the
Effective Time, the holders of certificates representing SCW
Common Shares and each series of SCW Preferred Shares outstanding
immediately prior to the Effective Time shall cease to have any
rights with respect to stock of the Surviving Corporation and
their sole rights shall be with respect to the HoldingCo Common
Shares or series of HoldingCo Preferred Shares, respectively,
into which their SCW Common shares or series of SCW Preferred
Shares shall have been converted in connection with the Merger.
ARTICLE 6
CONDITIONS OF THE MERGER
Completion of the Merger is subject to the satisfaction of
the following conditions:
6.1 SCW Shareholder Approval. The principal terms of
this Agreement shall have been approved by shares constituting a
majority of the combined voting power of the outstanding Common
Shares and Preferred Shares. Each outstanding Common Share shall
be entitled to one-tenth of a vote and each outstanding Preferred
Share shall be entitled to one vote.
6.2 HoldingCo Common Stock Listed. The HoldingCo
Common Stock to be issued and to be reserved for issuance
pursuant to the Merger shall have been approved for listing, upon
official notice of issuance, by the New York Stock Exchange.
6.3 CPUC Approval. The California Public Utilities
Commission shall have approved the formation of a holding company
structure for SCW pursuant to this agreement of merger in a form
substantially similar to the Agreement, subject only to
conditions deemed reasonable by the Board of Directors of SCW.
6.4 Tax Opinion. The Company shall have received
from O'Melveny & Xxxxx LLP an opinion to the effect that the
Merger will constitute a tax-free reorganization for federal
income tax purposes.
ARTICLE 7
AMENDMENT AND TERMINATION
7.1 Amendment. Subject to applicable law, the
parties to this Agreement, by mutual consent of their respective
boards of directors, may amend, modify or supplement this
Agreement in such manner as may be agreed upon by them in writing
at any time before or after approval of this Agreement by the
pre-Merger shareholders of SCW (as provided in Section 6.1
above).
7.2 Termination. This Agreement may be terminated
and the Merger and other transactions provided for by this
Agreement may be abandoned at any time, whether before or after
approval of this Agreement by the pre-Merger shareholders of SCW,
by action of the board of directors of SCW if such board of
directors determines for any reason that the completion of the
transactions provided for herein would for any reason be
inadvisable or not in the best interests of SCW or its
shareholders.
ARTICLE 8
MISCELLANEOUS
8.1 Approval of HoldingCo Shares. By its execution
and delivery of this Agreement, SCW, as the sole pre-Merger
shareholder of HoldingCo, consents to, approves and adopts this
Agreement and approves the Merger, subject to approval of this
Agreement by the pre-Merger shareholders of SCW and the
satisfaction of all other conditions specified in Article 6
above.
8.2 Approval of MergeCo Shares. By its execution and
delivery of this Agreement, HoldingCo, as the sole pre-Merger
shareholder of MergeCo, consents to, approves and adopts this
Agreement and approves the Merger, subject to approval of this
Agreement by the pre-Merger shareholders of SCW and the
satisfaction of all other conditions specified in Article 6
above.
IN WITNESS WHEREOF, SCW, HoldingCo and MergeCo, pursuant
to approval and authorization duly given by resolutions adopted
by their respective boards of directors, have each caused this
Agreement to be executed by its chairman of the board or its
president or one of its vice presidents and by its secretary or
one of its assistant secretaries.
SOUTHERN CALIFORNIA WATER COMPANY,
a California corporation
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: President
By: /s/ XxXxxxxxx Xxxxxx III
__________________________
Name: XxXxxxxxx Xxxxxx III
Title: Secretary
AMERICAN STATES WATER COMPANY,
a California corporation
By: /s/ Xxxxx X. Xxxxx
--------------------------
Name: Xxxxx X. Xxxxx
Title: President
By: /s/ XxXxxxxxx Xxxxxx III
--------------------------
Name: XxXxxxxxx Xxxxxx III
Title: Secretary
SCW ACQUISITION CORP.,
a California corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------
Name: Xxxxx X. Xxxxx
Title: President
By: /s/ XxXxxxxxx Xxxxxx III
--------------------------
Name: XxXxxxxxx Xxxxxx III
Title: Secretary
