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[EXHIBIT 8]
Dear Xxxxx Companies, Inc., X.X. Xxxxx and Co., Geneva Rock Products Inc.,
Utah Service Inc. and Beehive Insurance Agency Inc. and the Stockholders of
all above-named corporations:
Pursuant to an Agreement and Plan of Merger (the "Agreement") by and among Xxxxx
Companies, Inc., ("Companies"), X.X. Xxxxx Reorganization Corporation ("CRC"),
Geneva Rock Reorganization Corporation ("GRRC"), Utah Service Reorganization
Corporation ("USRC"), Beehive Insurance Reorganization Corporation ("BIRC")
(CRC, GRRC, USRC and BIRC are hereafter collectively referred to as the "Merger
Cos."), WW. Xxxxx and Co., ("Xxxxx"), Geneva Rock Products Inc. ("Geneva"), Utah
Service Inc. ("Service") and Beehive Insurance Agency Inc. ("Beehive") (Clyde,
Geneva, Service and Beehive are hereafter collectively referred to as the
"Targets"), the Merger Cos. will be merged with and into the Targets (the
"Merger(s)").
Xxxxx Xxxxxxxx LLP (the "Firm") has been requested to provide an opinion (the
"Opinion") as to certain federal income tax consequences resulting from the
Mergers. Specifically, with respect to these matters, you have asked the Firm to
address the federal income tax consequences of the following questions:
1. Whether the Mergers will constitute "reorganizations" within the meaning of
Section 368(a)(1)1 of the Code and/or transfers within the meaning of
Section 351?
2. Whether Companies and the Targets will each be a "party to the
reorganization" within the meaning of Section 368(b) of the Code?
3. Whether gain or loss will be recognized to the Shareholders (as defined
below) upon the receipt of Companies voting common stock solely in exchange
for common stock of the Targets?
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(1) All section references are to the Internal Revenue Code of 1986, as amended.
All regulation references are to the Income Tax Regulations thereunder.
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4. Whether the basis of the shares of Companies voting common stock received
by the Shareholders will be the same, in each instance, as the basis of the
shares of common stock of the Targets surrendered in exchange therefor?
5. Whether the holding period of Companies voting common stock received by the
Shareholders will include, in each instance, the period during which the
common stock of the Targets surrendered in exchange therefor was held?
6. Whether the payment of cash in lieu of fractional share interests of
Companies will be treated as if the fractional shares were distributed as
part of the Merger and then redeemed by the Companies under the provisions
of Section 302 of the Code?
7. Whether the Distribution (as defined below) will result in the recognition
of gain?
In rendering the Opinion, representatives of the Firm have examined and relied
upon (i) the Agreement; (ii) a draft Form S-4 Registration Statement; and (iii)
a draft Stock Redemption Plan (these items are hereafter collectively referred
to as the "Documents").
Additionally, the Opinion is explicitly conditioned upon representations
contained in certain letters dated as of the date hereof from the Companies and
the Shareholders to the Firm, copies of which are attached to this opinion as
Exhibit A and Exhibit B (the "Representation Letters"). In that regard, the Firm
hereby incorporates by reference all of the statements of facts and factual
representations contained in the Documents and Representation Letters and, for
purposes of rendering the Opinion, the Firm has assumed (without attempting any
independent verification) that all of the statements of facts and factual
representations set forth in the Documents and Representation Letters are true
and complete.
I. OPINION
Based upon the foregoing facts, factual assumptions and representations set
forth in Sections II and III hereof, together with the Exhibits attached hereto
and incorporated by reference in each of such Sections, and the Code, Committee
Reports, legislative history and the relevant Internal Revenue Service and
judicial precedents as of the date hereof, the Firm is of the Opinion that:
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1. For federal income tax purposes, the Mergers in each instance will be
ignored under the step transaction doctrine discussed below and the
Restructuring (as defined below) will be considered a transfer by each of
the Shareholders of their respective stock of the Targets to Companies
solely in exchange for voting common stock (Rev. Rul. 67-448, 1967-2 C.B.
144). As viewed above, the Restructuring with respect to each of the
Targets will qualify as a reorganization within the meaning of Section
368(a)(1)(B) of the Code and/or a transfer of property as described in
Section 351.
2. Companies and the Targets will each be a "party to the reorganization"
within the meaning of Section 368(b) of the Code. Section 368(b) of the
Code.
3. No gain or loss will be recognized to the Shareholders (except to the
extent of fractional share interest, if any,) upon the receipt of
Companies' voting common stock solely in exchange for the Targets common
stock. Section 354(a)(1) and Section 351(a) of the Code.
4. The basis of the shares of Companies voting common stock received
(including fractional share interests, if any,) by the Shareholder will be
the same, in each instance, as the basis of the common stock of the Targets
surrendered by such shareholder in exchange therefor. Section 358(a)(1) of
the Code.
5. Provided the common stock of the Targets surrendered by the Shareholder was
held as a capital asset, the holding period of the Companies voting common
stock (including any fractional shares interest) received in exchange
therefor will include the period during which common stock of the Targets
surrendered by such shareholder in exchange therefor was held. Section
1223(1) of the Code.
6. The payment of cash to any Shareholder made in lieu of a fractional
interest in a share of Companies' voting common stock to which such
Shareholder is entitled will be treated as a distribution in full payment
for such fractional interest. Rev. Proc. 77-41, 1977-2 C.B. 574. Provided
the fractional interest surrendered by the Shareholder was held as a
capital asset, any gain or loss recognized by the shareholder on receipt of
a payment of cash in exchange therefor will be taxable as a capital gain or
loss, long-term or short-term, depending on
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whether the Shareholder had held the share of Companies' common stock
giving rise thereto for more than 18 months before the Restructuring.
7. Any gain realized on the Distribution will not result in immediate
recognition but will be taken into income pursuant to the provisions of
Section 1.1502-13 of the Regulations.
II. FACTS
A. BACKGROUND
Companies is a Utah corporation that directly conducts no business activities
but acts as a holding company for a portion of the stock of the Targets.
Specifically, Companies holds 33.78% of the stock of Xxxxx, 21.67% of the stock
of Geneva, 31.37% of the stock of Service and 17.22% of the stock of Beehive.
Except for cash, the stock of the Targets is Companies only asset. The
shareholders of Companies and their direct percentage of stock holdings is
attached hereto as Exhibit C (these shareholders are hereafter collectively
referred to as the "Companies Shareholders"). In November 1997, the name of
Companies was changed from X.X. Xxxxx Investment Co.
Xxxxx is a Utah corporation that is directly engaged in various aspects of the
construction industry. The shareholders of Xxxxx and their direct percentage of
stock holdings is attached hereto as Exhibit D (these shareholders are hereafter
referred to as the "Xxxxx Shareholders"). Xxxxx currently holds 34.77% of the
stock of Geneva.
Geneva is a Utah corporation that is engaged in the ready-mix concrete business,
as well as other construction related activities. The shareholders of Geneva and
their direct percentage holdings is attached hereto as Exhibit E (these
shareholders are hereafter referred to as the "Geneva Shareholders").
Service is a Utah corporation that owns and operates a hardware store and
adjacent gasoline/convenience store. The shareholders of Service and their
direct percentage holdings is attached as Exhibit F (these shareholders are
hereafter collectively referred to as the "Service Shareholders").
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Beehive is a Utah corporation that operates as an independent insurance agency
providing all types of insurance coverage for the general public. The
shareholders of Beehive and their direct percentage holdings is attached as
Exhibit G (these shareholders are hereafter collectively referred to as the
"Beehive Shareholders"). (The Xxxxx Shareholders, the Geneva Shareholders, the
Service Shareholders and the Beehive Shareholders are hereafter referred to as
the "Shareholders".)
The Merger Cos. are each wholly-owned, newly-organized subsidiaries of Companies
formed solely for the purpose of participating in the proposed transaction
described below.
B. THE TRANSACTION
For what has been represented to be valid business reasons, the following
transactions (hereafter collectively referred to as the "Restructuring") will
occur:
1. Each outstanding share of Companies on November 13, 1997 at 5:00 p.m. was
converted into 40 shares.
2. All cash held by Companies other than an amount necessary to satisfy its
tax liability upon the consummation of the Restructuring will be
distributed to Companies Shareholders.
3. In anticipation of the Restructuring, Companies has adopted a stock
redemption plan (the "Plan") pursuant to which it is expected that
Companies will redeem a limited number of its shares each year at the
discretion of the Board of Directors of Companies.
4. The Merger Cos. will be formed as described above.
5. Pursuant to the terms of the Agreement, CRC, GRRC, USRC and BIRC will merge
with and into Clyde, Geneva, Service and Beehive, respectively. The Mergers
will be pursuant to the terms of the applicable state laws, with the
Targets being the surviving corporations. In accordance with applicable
state law and the merger agreement between Companies, the Targets and the
Merger Cos., the Mergers will occur sequentially on the same date with CRC
merging into Xxxxx (the "Xxxxx Merger") first, thereafter BIRC merging into
Beehive, and one hour thereafter GRRC merging into Geneva.
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6. Immediately after the Xxxxx Merger and approximately one hour prior to any
other Mergers, Xxxxx will distribute (the "Distribution") all of its stock
holdings in Geneva to Companies.
7. All of the outstanding stock of the Targets, except for shares held by
Companies, fractional share interests or shares held by dissenting
shareholders, if any, will be converted into solely voting common stock of
Companies.
8. As a result of the Mergers and Distribution, all of the outstanding stock
of the Targets will be held by Companies.
9. No fractional share interests of Companies' stock will be issued. In lieu
thereof, cash will be paid.
10. Pursuant to the terms of the applicable state laws, shareholders of the
Targets may dissent to the Mergers. Any cash paid to dissenting
shareholders will be provided by their respective Target corporation.
Companies will provide no funds directly or indirectly to dissenting
shareholders of the Targets.
11. All corporate expenses of the Restructuring will be paid by Companies from
dividends, received after the Mergers from the Targets. If the
Restructuring is not consummated, each of the Targets would pay its
proportionate share of the Restructuring expenses.
At the conclusion of the Restructuring, the Shareholders will hold at least 80%
of the outstanding stock of Companies and each of the Targets will be a
wholly-owned subsidiary of Companies.
III. REPRESENTATIONS
The following representations were made by the management of the Targets,
Companies, and certain Shareholders who individually and collectively understand
that these representations form an integral part of our opinion regarding the
Restructuring:
1. The fair market value of Companies' stock received as a result of the
Restructuring will in each instance be approximately equal to the fair
market value of the Targets' stock surrendered.
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2. The Targets have no plan or intention to issue additional shares of its
stock that would result in Companies losing control of any of the Targets
within the meaning of Section 368(c) of the Code.
3. Except as provided for in the Plan, Companies has no plan or intention to
reacquire any of its stock issued in the transaction.
4. Companies has no plan or intention to liquidate the Targets, to merge the
Targets with or into another corporation; to sell or otherwise dispose of
the stock of the Targets except for transfers of stock to corporations
controlled by Companies or the Targets; or to cause the Targets to sell or
otherwise dispose of any of its assets, except for dispositions made in the
ordinary course of business.
5. Following the Restructuring, each Target will continue its historic
business or use a significant portion of its historic business assets in a
business.
6. On the date of the Restructuring, the fair market value of the assets of
the Targets will in each instance exceed the sums of its liabilities, plus
the amount of liabilities, if any, to which the assets are subject.
7. The Targets are not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
8. None of the compensation received by any of the Shareholder will be
separate consideration for, or allocable to, any of their shares of
Targets' stock; none of the shares of Companies stock received by any
shareholder-employees will be separate consideration for, or allocable to,
any employment agreement; and the compensation paid to any
shareholder-employees will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arm's-length
for similar services.
9. Immediately after the Restructuring, the Targets will not have outstanding
any warrants, options, convertible securities or any other type of right
pursuant to which any person could acquire stock that will cause Companies
not to control the Targets within the meaning of Section 368(c) of the
Code.
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10. There are valid business purposes for the Restructuring.
11. To the best of the knowledge of the management of the Companies,
shareholders of the Targets who hold less than 2% of the stock have no plan
or intention to sell, exchange or otherwise dispose of any of the
Companies' stock received in the proposed transaction except as provided
under the stock redemption plan of Companies effective as of January 1,
1999.
12. Except as set forth immediately below any Shareholder holding 2% or more of
Companies' stock has no plan or intention to sell, exchange or otherwise
dispose of any of Companies stock received in the proposed transactions.
While none of the Shareholders has a current plan to do so, a Shareholder
may, if circumstances require, exercise his or her rights pursuant to the
stock redemption plan of Companies effective as of January 1, 1999.
13. No liabilities will be assumed by Companies or the Targets as part of the
transaction. The stock of the Targets is not subject to any liabilities.
14. The payment of cash in lieu of fractional shares of Companies stock is
solely for the purpose of avoiding the expense and inconvenience to
Companies of issuing fractional shares and does not represent separately
bargained-for consideration. The total cash consideration that will be paid
in the transaction to the Shareholders instead of issuing fractional shares
of Companies stock will not exceed one percent of the total consideration
that will be issued in the transaction to the Shareholders in exchange for
their shares of the Targets' stock. The fractional share interests of each
Shareholder will be aggregated, and no Shareholder will receive cash in an
amount equal to or greater than the value of one full share of Companies
stock.
15. Companies has not acquired any of the stock of the Targets during the last
five years.
16. Companies will file a federal consolidated tax return for the year that
includes the Distribution.
17. Except as set forth below, Companies and the Shareholders will pay their
own expenses incurred in the Restructuring. Companies will pay expenses
that are solely and directly
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related to the transaction in accordance with the guidances established in
Rev. Rul. 73-54, 1973-1 C.B. 187.
18. The facts and factual representations set forth in Section II above,
together with the Exhibits attached hereto and incorporated herein by
reference thereto and in this Section III, are true, correct and complete
as of the date thereof.
19. There are no facts relevant to the transactions described in Section IIB or
issues addressed in this letter that have not been supplied to the Firm.
IV. DISCUSSION
In order to be tax-free, the Restructuring has to satisfy both the statutory
requirements set forth in the Code and several judicially-created concepts that
in certain instances are elaborated upon in the regulations and by the Internal
Revenue Service in administrative pronouncements such as revenue rulings and
procedures. Among these judicially-created concepts are continuity of interest,
continuity of business enterprise, the step transaction doctrine and business
purpose.
1. THE STATUTE
Section 368(a)(1)(B) of the Code defines the term reorganization to mean the
acquisition of the stock of a corporation (T) solely in exchange for voting
stock of another corporation (P) if immediately after the transaction P controls
T.
Section 351 of the Internal Revenue Code provides that no gain or loss will be
recognized if property is transferred to a corporation by one or more persons
solely in exchange for stock of the transferee corporation provided that
immediately after the exchange the person or persons who transferred the
property are in control of the transferee. While neither the Code nor Internal
Revenue Service regulations define the term "property," stock of a corporation
undoubtedly satisfies the requirement.
As defined in Section 368(c) of the Code, the term control means the ownership
of stock possessing at least 80% of the total combined voting power of all
classes of stock entitled to vote and at least 80% of the total number of shares
of all other classes of stock.
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In Rev. Rul. 67-448, 1967-2 C.B. 144, the Internal Revenue Service (the
"Service") determined that a transaction could constitute a reorganization
within the meaning of Section 368(a)(1)(B) if a corporation, P, gained control
of another corporation, T, solely in exchange for its voting stock through a
merger of a newly-formed transitory subsidiary of P with and into T. The
existence of the subsidiary and its merger into T are ignored for federal income
tax purposes. The transaction is treated as a direct acquisition by P of the T
stock solely in exchange for voting stock. This same principal applies to ignore
the existence of the Subsidiary and treat the transaction as a transfer of
property pursuant to Section 351. In Rev. Rul. 69-585, 1969-2 C.B. 56, the
Service determined that both the control and solely for voting stock requirement
of Section 368(a)(1)(B) were satisfied when P received 25% of the stock of T as
a dividend from its wholly-owned subsidiary.
The structure of the Mergers is consistent with the transaction described in
Rev. Rul. 67-448. Companies formation of Merger Cos. will be accomplished solely
to effectuate the Mergers. Except for minimal capital, the Merger Cos. will have
no assets and will conduct no business activities. As a result of the Merger and
Distribution, the Targets will become wholly-owned subsidiaries of Companies
with its shareholders receiving solely voting common stock of Companies. Thus
for federal income tax purposes, the Merger should be ignored. Companies should
be treated as transferring solely its voting common stock to the Shareholders in
exchange for their stock. Immediately after the Restructuring, Companies will
hold all of the stock of the Targets and will thus control the Targets within
the meaning of Section 368(c). Representations have been obtained indicating
Companies will not undertake a transaction that will result in the loss of
control of the Targets and result in the Shareholders receiving non-Companies
voting stock consideration for their stock. Consequently, the Restructuring
meets the definition of a reorganization as defined in Section 368(a)(1)(B).
Additionally, since the facts indicate that the shareholders hold at least 80%
of the outstanding stock of Companies immediately after the Restructuring, it
meets the definition of a transfer within the meaning of Section 351 of the
Code.
A party to the reorganization is defined in Section 368(b) of the Code to
include both corporations in the case of reorganization resulting from the
acquisition by one corporation of the stock or properties of another. Since the
Restructuring qualifies as a reorganization within the meaning of Section
368(a)(1)(B), Companies and each of the Targets will each be a party to the
reorganization.
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Section 354(a)(1) of the Code provides that neither gain nor loss will be
recognized if the stock in a corporation that is a party to reorganization is
exchanged pursuant to a plan of reorganization solely for stock of another
corporation that is a party to the reorganization. Under Section 356(a)(1), if
property or money is received in addition to the stock, gain, if any, to the
recipient will be recognized but in an amount not in excess of the sum of the
money or the fair market value of any other property. Pursuant to
Section 356(a)(2), if the receipt of money or other property has the effect of a
dividend distribution (determined using the attribution rules of Section 318),
then it will be treated as a dividend distribution to the extent of each
distributees ratable share of earnings and profits. The remainder of any gain
will be treated as gain from the exchange of property.
The Shareholders will receive solely Companies voting common stock in the
Restructuring. Consequently, pursuant to Section 354(a)(1), no gain or loss
should be recognized to the Shareholders on the receipt of Companies stock in
exchange for stock of the Targets. Similarly, since the Restructuring satisfies
the requirements of Section 351, no gain or loss is also recognized under that
provision.
Section 351(e) of the Code provided that the general non-recognition rule of
Section 351(a) does not apply to transfers of property to an investment company.
As part of the Taxpayer Relief Act of 1997, Congress provided guidance in
Section 351(e)(1) in determining when a company is to be considered an
investment company. The Firm has reviewed Section 351(e)(1) and examined its
legislative history. It is the Firm's opinion that Companies is not an
investment company within the meaning of Section 351(e).
Additionally, a transaction cannot qualify as a reorganization within the
meaning of Section 368(a) if any two parties to the transaction are investment
companies within the meaning of Section 368(a)(2)(F) of the Code. The Firm is of
the opinion that no two parties to the Restructuring are investment companies
within the meaning of Section 368(a)(2)(F).
2. JUDICIAL GLOSS
a) Continuity of Interest
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It is well established that a reorganization under Section 368(a)(1) must also
meet the continuity of interest doctrine. See Pinellas Ice & Cold Storage Co. v.
Commissioner, S. Ct., 3 USTC P. 1023, 287 US 462 (1933) and Section 1.368-1(b)
of the Regulations. The purpose of this doctrine is to ensure that the
shareholders of the acquired corporation ("Target") maintain, if only
indirectly, a substantial part of the equity investment in Target following the
reorganization through holding of the acquiring corporation's stock. If the
Target shareholders do not satisfy this requirement, the transaction becomes a
taxable stock or asset acquisition. See Helvering v. Minnesota Tea Co., S. Ct.,
36-1 USTC P. 9015, 296 US 378. In the case of the Restructuring, if it was a
taxable event, the Shareholders would be considered to have sold their stock to
Companies.
In ascertaining whether sufficient continuity is present, the Internal Revenue
Service and the courts look to the historic (old and cold) shareholders of
Target. See Superior Coach of Florida Inc., 80 TC 895 (1983) and Yoc Heating
Co., 61 TC 168 (1973). These historic shareholders must receive a substantial
part of the consideration in stock of the acquiring corporation. It is generally
accepted that 40% is sufficient continuity. See Xxxxxx x. Xxxxxxxxx, S.
Ct., 36-1 USTC P. 9019. In the Restructuring, the Shareholders, are receiving
solely voting stock of Companies.
Continuity of interest must also be maintained by the historic shareholders of
Target for a period of time after the reorganization . It is clear that the
Internal Revenue Service takes post-reorganization sales undertaken as part of
the plan of reorganization into account in measuring continuity of interest. See
Section 3.02 of Rev. Proc. 77-37, 1977-2 C.B. 568. To satisfy
post-reorganization continuity, case law and IRS pronouncements, while not
completely consistent or clear, appear to require that at the time of
reorganization, Target's shareholders had no intention, or perhaps fixed
intention, to dispose of the stock of the acquiring corporation. See McDonalds
Restaurants of Illinois v. Commissioner, 82-2 USTC P. 9581 (1982); Estate of
Christian, 57 TCM 1231, Dec. 45296 (M), TC Memo 1989-413; and X.X. Xxxxxx, 88 TC
1415 (1987). Generally, the actual ownership of the stock of the acquiring
corporation for some period of time following the transaction establishes the
requisite continuity. See Rev. Rul. 66-23, 1966-1 C.B. 67 and Rev. Rul. 78-142,
1978-1 C.B. 111.
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Nothing in the Documents or the facts as the Firm understands them indicates
that the Shareholders, who will participate in the Restructuring, are not its
historic shareholders for purposes of continuity of interest. Additionally, it
has been represented that, except as might occur under the Plan, to the best of
management's knowledge the Shareholders of the Targets who hold less than 2% of
their stock will not dispose of any amount of Companies stock after the
Restructuring. Additionally, except as might occur under the Plan, Shareholders
of the Targets who hold 2% or more of their stock have no plan or intention to
dispose of any amount of their shares. Consequently, it is our opinion that
continuity of interest should be satisfied in the Restructuring.
b) Continuity of Business Enterprise
A transaction constitutes a tax-free reorganization only if there is a
"continuity of the business enterprise under the modified corporate form." Reg.
Section 1.368-1(b). This means that the acquiring corporation must either (1)
continue Target's historic business or (2) use a significant portion of Target's
historic business assets in a business. Reg. Section 1.368-1(d)(2); and Xxxxxx
X. Xxxxx x. Commissioner, CA-6, 81-2 USTC P. 9517, aff'g, rev'g, and rem'g TC,
653 F.2d 253. In determining whether a line of business or a portion of Target's
historic business assets is "significant," all relevant facts and circumstances
are considered. Reg. Section 1.368-1(d)(3), (4).
A representation has been given that indicates continuity of business will be
satisfied. The facts support this representation. Given the above, it is our
opinion continuity of business enterprise will be satisfied in the
Restructuring.
c) Step Transaction
The step transaction doctrine permits a series of formally separate steps to be
amalgamated and treated as a single transaction if the steps are in substance
integrated, interdependent and focused toward a particular result. See Xxxxxx,
p. 1428 and Rev. Rul. 79-250, 1979-2 C.B. 156.
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A review of case law indicates the step transaction doctrine is a very nebulous
concept. While courts generally speak in terms of end result, binding commitment
or interdependence in applying the step transaction doctrine, the key to its
application, regardless of the test the court allegedly applies, appears to be
intent and temporal proximity. See Xxxxxx; X. Xxxxxxxx, 15 TC 312 (195));
Cal-Maine Foods Inc. v. Commissioner, 93 TC 181 (1989); and Private Letter
Ruling 8742033 (July 20, 1987).
If it can be demonstrated that at the time of the first in a series of
transactions the taxpayer had no intent to effectuate the subsequent
transactions, the series of transactions generally will not be stepped together.
See Xxxxxx; Estate of Christian, 57 TCM 1231, Dec. 45926 (M) TCM 1989-413 and
IRS Technical Advice Memorandum 8646002 (July 18, 1989). Courts rarely rely on
the word of the taxpayer in discerning intent but rather look at all of the
facts and circumstances. Unanticipated, material changes in circumstances beyond
the taxpayer's control are critical in establishing the lack of intent.
The amount of time that elapses between the first and subsequent transaction
often is significant in determining whether to step the transactions together.
The shorter the period of time between the transactions, the greater the
likelihood of stepping the transactions together. See Private Letter Ruling
8742033 (July 20, 1987) [two transactions four months apart were not viewed as
independent].
The step transaction doctrine applies to the Restructuring in the sense that the
Merger of Merger Cos. with and into the respective Targets will be ignored. The
substance of the Mergers is a direct acquisition of the Targets stock by
Companies solely in exchange for its voting stock.
Additionally, the step transaction doctrine could apply to negate the control
immediately after requirement of Section 351 if the Shareholders as part of the
Restructuring dispose of an amount of Companies' stock sufficient to result in
the loss of control as defined in Section 368(c). Nothing in the Documents or
facts as the Firm understands them indicates that this will occur. The only
possible sale of stock might occur through the operation of the Plan. The Firm
is of the opinion that any such sale, based on the facts and representations
given, should be treated as a transaction separate from the Restructuring and
thus have no impact on the Restructuring.
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d) Business Purpose
There must be a valid business purpose for a reorganization. Xxxxxxx x.
Xxxxxxxxx, 293 US 465 (1935) and Section 1.368-1(b), Section 1.368-1(c) and
Section 1.368-2(g) of the Regulations. Companies and the Targets Boards of
Directors believe there are numerous valid business reasons for the
Restructuring. Nothing in the Documents or facts contradict this. Thus, the Firm
is of the opinion that a valid business reason exists for the Restructuring.
3. CASH RECEIVED IN LIEU OF FRACTIONAL SHARES
No fractional shares of Companies voting common stock will be issued in the
Restructuring. A Target shareholder who receives cash in lieu of a fractional
share would generally be treated as having received such fractional share
pursuant to the Mergers and then as having exchanged such fractional share for
cash in a redemption by Companies subject to Section 302(a) of the Code,
provided that such redemption is "substantially disproportionate" with respect
to such Target shareholder or is "not essentially equivalent to a dividend." If
the Companies common stock represents a capital asset in the hands of the
shareholder, then the shareholder will generally recognize capital gain on such
a deemed redemption of the fractional share in an amount equal to the excess of
the amount of cash received for such fractional share over the shareholder's tax
basis in the fractional share, or capital loss in an amount equal to the excess
of the shareholder's tax basis in the fractional share over the amount of cash
received for such fractional share. Any such capital gain or loss will be
long-term if the Targets' common stock exchanged was held for more than 18
months.
Administratively, however, the Internal Revenue Service has concluded in Rev.
Proc. 77-41 that cash in lieu of fractional shares will be treated as received
in an exchange subject to Section 302(a) of the Code if the cash distribution is
undertaken solely for the purpose of saving the corporation the expense and
inconvenience of issuing and transferring a fractional share interest, and it is
not separately bargained for consideration. Additionally, certain information
such as the maximum amount of cash that can be received by any shareholder and
the percentage of total cash consideration will be considered in determining
whether the transaction is governed by Section 302(a). A representation has been
made that the sole purpose of issuing cash in lieu of fractional share
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interests in Companies is to save Companies the expense and inconvenience of
issuing such an interest and that this does not represent separately bargained
for consideration. An additional representation has been made with respect to
the minimal amount of cash an individual shareholder of a Target can receive in
exchange for a fractional share interest as well as to the amount of total cash
being issued in exchange for fractional shares. Accordingly, any cash issued in
lieu of fractional shares should be treated as a sale or exchange under Section
302(a).
The Service has also determined that the payment of cash in lieu of fractional
share interests by the acquiring corporation does not violate the solely for
requirement of Section 368(a)(1)(B) if the cash is not separately bargained for
consideration. Rev. Rul. 66-365, 1966-2 C.B. 116. A representation to this
effect has been given to the Firm. Consequently, any cash provided by Companies
in lieu of any fractional share interests will not be treated as non-stock
consideration for purposes of Section 368(a)(1)(B).
V. CAVEATS AND LIMITATIONS
This opinion is subject to the receipt of all Representation Letters and the
consummation of the Restructuring as described herein.
It is assumed for the purpose of this Opinion that the management of Companies
and the Targets are not aware of any facts inconsistent with those set forth
above and in the Documents. Also, it is assumed that the Documents accurately
reflect all consummated and proposed transactions. The existence of inconsistent
facts and/or consummated or proposed transactions not set forth in the Documents
could materially alter our opinions.
Additionally, the opinions expressed herein are based upon the provisions of the
Code, Treasury regulations (both current and proposed) promulgated thereunder,
judicial decisions, revenue rulings and procedures and related authorities
issued to, and in effect on, the date of this opinion.
Furthermore, no assurance can be given that the Internal Revenue Service or the
courts will not alter their present views, either prospectively or
retroactively, or adopt new views in respect of
16
17
our opinions. In that event, the opinions expressed herein would necessarily
have to be reevaluated in light of any change in such views. We assume no
obligation to advise you of any change in any such provisions or views which
would affect our opinions set forth herein.
Our opinion is based solely upon the facts, representations and assumptions
contained herein, and we have not undertaken an independent investigation of any
such facts or representations. Our opinion would require reevaluation in the
event of any change in any such fact or representation.
The opinions expressed in this opinion reflect what we believe to be the federal
income tax consequences of the transactions described herein. Nevertheless, they
are only opinions, and no assurance can be given that the Internal Revenue
Service will not challenge any position taken in such opinions. Furthermore, it
should be noted that we express no opinion regarding tax consequences under the
laws of any state or local jurisdiction.
VI. SUBSTANTIAL AUTHORITY
Without limiting the foregoing, providing the facts, assumptions, and
representations contained herein are correct, substantial authority, within the
meaning of Section 6662 of the Code, exists to each of the conclusions made in
this opinion.
If you have questions, please feel free to call either Xxxxx Xxxxx at
801/373-3654 or Xxxxxx X. Xxxxx at 202/861-4151.
17
18
VII. CONSENT
We hereby consent to the references contained in the Form S-4 Registration
Statement of Companies ("Form S-4") to the Firm's Opinion and to the inclusion
of the Opinion as an exhibit to the Form S-4.
Sincerely,
/s/ XXXXX XXXXXXXX LLP
----------------------
Xxxxx Xxxxxxxx LLP
November 19, 1997
18
19
*This representation letter was signed by selected
executive officers of the Companies
Exhibit A
Xxxxx Companies, Inc.
November 19, 1997
Mr. Xxxxx Xxxxx
Xxxxx Xxxxxxxx LLP
0000 X. Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000
Re: Representation Letter for that Certain Opinion Letter (the "Opinion")
of Xxxxx Xxxxxxxx LLP (the "Firm")
Dear Xx. Xxxxx:
The Firm has acted as tax adviser to the Xxxxx Companies (the Companies) in
connection with their Restructuring as defined in the Opinion.
The Companies have requested that the Firm render the Opinion concerning the
various federal tax ramifications resulting from the Restructuring. The Firm is
delivering the Opinion to the Companies with respect to this issue. Defined
terms used in this letter and not defined herein are used as defined in the
Opinion. In Section II of the Opinion, including the Exhibits attached therein
in Section I of the Opinion, the Firm recites the facts relevant to the
transaction and Section III of the Opinion recites certain factual
representations relevant to the transaction on which the Firm has relied, and
assumed the truth, correctness and completeness of, in rendering the Opinion.
The purpose of this letter is to verify the facts contained in Section II of the
Opinion and the factual representations contained in Section III of the Opinion
to the Firm for purposes of rendering the Opinion. For purposes of rendering the
Opinion, [The name and title of each individual who signed this representation
letter was inserted here] hereby represents and warrants the following actual
statements and representations:
REPRESENTATIONS
The following representations were made by the management of The Targets, Xxxxx
Companies, Inc. and the Targets Shareholders who individually and collectively
understand that these representations form an integral part of our opinion
regarding the Restructuring:
1. The fair market value of the Xxxxx Companies, Inc. stock received as a
result of the Restructuring will in each instance be approximately equal to
the fair market value of the Targets' stock surrendered.
2. The Targets have no plan or intention to issue additional shares of its
stock that would result in Xxxxx Companies, Inc. losing control of any of
the Targets within the meaning of Section 368(c) of the Code.
A-1
20
Exhibit A
Xxxxx Companies, Inc.
3. Xxxxx Companies, Inc. has no plan or intention to reacquire any of its
stock issued in the transaction.
4. Xxxxx Companies, Inc. has no plan or intention to liquidate the Targets, to
merger the Targets with or into another corporation; to sell or otherwise
dispose of the stock of the Targets except for transfers of stock to
corporations controlled by Xxxxx Companies, Inc. or the Targets; or to
cause the Targets to sell or otherwise dispose of any of its assets, except
for dispositions made in the ordinary course of business.
5. Following the Restructuring, the Targets will continue its historic
business or use a significant portion of its historic business assets in a
business.
6. On the date of the Restructuring, the fair market value of the assets of
the Targets will in each instance exceed the sums of its liabilities, plus
the amount of liabilities, if any, to which the assets are subject.
7. The Targets are not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
8. None of the compensation received by any of Targets Shareholder will be
separate consideration for, or allocable to, any of their shares of
Targets' stock; none of the shares of Xxxxx Companies, Inc. stock received
by any shareholder-employees will be separate consideration for, or
allocable to, any employment agreement; and the compensation paid to any
shareholder-employees will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arm's-length
for similar services.
9. Immediately after the Restructuring, the Targets will not have outstanding
any warrants, options, convertible securities or any other type of right
pursuant to which any person could acquire stock that will cause Xxxxx
Companies, Inc. not to control the Targets within the meaning of Section
368(c) of the Code.
10. There are valid business purposes for the Restructuring.
11. To the best of the knowledge of the management of the Companies
shareholders of the Targets who hold less than 2% of the stock have no plan
or intention to sell, exchange or otherwise dispose of any of the stock of
Xxxxx Companies, Inc. received in the proposed transaction except as
provided under the stock redemption plan of Xxxxx Companies, Inc.,
effective as of January 1, 1999.
12. No liabilities will be assumed by Xxxxx Companies, Inc. or the Targets as
part of the transaction. The stock of the Targets is not subject to any
liabilities.
13. The payment of cash in lieu of fractional shares of Xxxxx Companies, Inc.
stock is solely for the purpose of avoiding the expense and inconvenience
to Xxxxx Companies, Inc. of issuing fractional shares and does not
represent separately bargained-for consideration. The total cash
consideration that will be paid in the transaction to the Shareholders
instead of issuing
A-2
21
Exhibit A
Xxxxx Companies, Inc.
fractional shares of Xxxxx Companies, Inc. stock will not exceed one
percent of the total consideration that will be issued in the transaction
to the Shareholders in exchange for their shares of the Targets' stock. The
fractional share interests of each Shareholder will be aggregated, and no
Shareholder will receive cash in an amount equal to or greater than the
value of one full share of Xxxxx Companies, Inc. stock.
14. Xxxxx Companies, Inc. has not acquired any of the stock of the Targets
during the last five years.
15. Xxxxx Companies, Inc. will file a federal consolidated tax return for the
year that includes the Distribution.
16. Except as set forth below, Xxxxx Companies, Inc., the Targets and the
Shareholders will pay their own expenses incurred in the Restructuring.
Xxxxx Companies, Inc., however, will pay certain expenses that are solely
and directly related to the transaction in accordance with the guidelines
established in Rev. Rul. 73-54, 1973-1 C.B. 187.
17. The facts and factual representations set forth in Section II above,
together with the Exhibits attached hereto and incorporated herein by
reference thereto and in this Section III, are true, correct and complete
as of the date thereof.
18. There are no facts relevant to the transactions described in Section IIB or
issues addressed in this letter that have not been supplied to the Firm.
[The name and title of each individual who signed this representation letter was
inserted here] hereby acknowledges and agrees that the Firm is relying upon the
factual statements and representations contained in this letter without any
independent verification thereof for purposes of rendering the Opinion and that
any untrue statement of a material fact contained in this letter or the Opinion
or the omission of any material fact contained in this letter or the Opinion
could render the opinion contained in the Opinion inapplicable. [The name and
title of each individual who signed this representation letter was inserted
here] further acknowledges and agrees that the Firm is under no continuing
obligation to update or otherwise verify any factual statements or
representations contained in this letter or the Opinion from and after the date
hereof.
Very truly yours,
A-3
22
Exhibit B*
Xxxxx Companies, Inc.
December 15, 1997
Mr. Xxxxx Xxxxx
Xxxxx Xxxxxxxx LLP
0000 X. Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000
Re: Representation Letter for that Certain Opinion Letter (the "Opinion")
of Xxxxx Xxxxxxxx LLP (the "Firm")
Dear Xx. Xxxxx:
The Firm has acted as tax adviser to the Xxxxx Companies (the Companies) in
connection with their Restructuring as defined in the Opinion.
The Companies have requested that the Firm render the Opinion concerning
the various federal tax ramifications resulting from the Restructuring. The
Firm is delivering the Opinion to the Companies with respect to these
issues.
For purposes of rendering the Opinion, [The names of the individuals who signed
this representation letter were inserted here], hereby represents and warrants
the following actual statements and representations:
REPRESENTATIONS
Except as set forth immediately below, I have no plan or intention to sell,
exchange or otherwise dispose of any of the Xxxxx Companies, Inc. stock received
in the proposed transactions.
Exception 1. While I have no current plan to do so, I may if circumstances
require exercise my rights pursuant to the stock redemption plan of Xxxxx
Companies, Inc. effective as of January 1, 1999.
Exception 2. I may transfer some or all of the Xxxxx Companies, Inc. stock
received to family members pursuant to an estate gifting plan subject to
the annual exclusion amounts set forth in Section 2503(b) of Internal
Revenue Code.
[The names of the individuals who signed this representation letter were
inserted here], hereby acknowledges and agrees that the Firm is relying upon the
factual statements and representations contained in this letter without any
independent verification thereof for purposes of rendering the Opinion and that
any untrue statement of a material fact contained in this letter or the omission
of any material fact contained in this letter could render the opinion contained
in the Opinion inapplicable. XxxxxXxxx XxxxXxxx further acknowledges and agrees
that the Firm is under no continuing obligation to update or otherwise verify
any factual statements or representations contained in this letter from and
after the date hereof.
Very truly yours,
* This representation letter was signed by shareholders holding 2% to 4.99%
ownership of Xxxxx Companies, Inc.
B-1
23
Exhibit B*
Xxxxx Companies, Inc.
November 19, 1997
Mr. Xxxxx Xxxxx
Xxxxx Xxxxxxxx LLP
0000 X. Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000
Re: Representation Letter for that Certain Opinion Letter (the "Opinion")
of Xxxxx Xxxxxxxx LLP (the "Firm")
Dear Xx. Xxxxx:
The Firm has acted as tax adviser to the Xxxxx Companies (the Companies) in
connection with their Restructuring as defined in the Opinion.
The Companies have requested that the Firm render the Opinion concerning the
various federal tax ramifications resulting from the Restructuring. The Firm is
delivering the Opinion to the Companies with respect to this issue. Defined
terms used in this letter and not defined herein are used as defined in the
Opinion. In Section II of the Opinion, including the Exhibits attached therein
in Section I of the Opinion, the Firm recites the facts relevant to the
transaction and Section III of the Opinion recites certain factual
representations relevant to the transaction on which the Firm has relied, and
assumed the truth, correctness and completeness of, in rendering the Opinion.
The purpose of this letter is to verify the facts contained in Section II of the
Opinion and the factual representations contained in Section III of the Opinion
to the Firm for purposes of rendering the Opinion. For purposes of rendering the
Opinion, XxxxxXxxx XxxxXxxx, hereby represents and warrants the following actual
statements and representations:
REPRESENTATIONS
The following representations were made by the management of The Targets, Xxxxx
Companies, Inc. and the Targets Shareholders who individually and collectively
understand that these representations form an integral part of our opinion
regarding the Restructuring:
1. Except as set forth immediately below, I have no plan or intention to sell,
exchange or otherwise dispose of any of the Xxxxx Companies, Inc. stock
received in the proposed transactions. While I have no current plan to do
so, I may if circumstances require exercise my rights pursuant to the stock
redemption plan of Xxxxx Companies, Inc. effective as of January 1, 1999.
2. The facts and factual representations set forth in Section II above,
together with the Exhibits attached hereto and incorporated herein by
reference thereto and in this Section III, are true, correct and complete
as of the date thereof.
* This representation letter was signed by shareholders holding more than 4.99%
ownership of Xxxxx Companies, Inc.
B-2
24
3. There are no facts relevant to the transactions described in Section IIB or
issues addressed in this letter that have not been supplied to the Firm.
[The names of the individuals who signed this representation letter was
inserted here], hereby acknowledges and agrees that the Firm is relying upon the
factual statements and representations contained in this letter without any
independent verification thereof for purposes of rendering the Opinion and that
any untrue statement of a material fact contained in this letter or the Opinion
or the omission of any material fact contained in this letter or the Opinion
could render the opinion contained in the Opinion inapplicable. XxxxxXxxx
XxxxXxxx further acknowledges and agrees that the Firm is under no continuing
obligation to update or otherwise verify any factual statements or
representations contained in this letter or the Opinion from and after the date
hereof.
Very truly yours,
B-3
25
Exhibit C
Xxxxx Companies, Inc.
NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES SHARES
------------ ------ ------
W. Xxxxxxx Xxxxx 158 0.2743%
Xxxxxxx X. Xxxxx 200 0.3472%
Xxxxxxx/Xxxxxxxx Xxxxx 2040 3.5418%
Xxxxxxx Xxxxx Trust 320 0.5556%
Xxxxxxxx Xxxxx Trust 320 0.5556%
Xxxxxxx Xxxxx 100 0.1736%
Xxxx Xxxxxx 100 0.1736%
Xxxxxx Xxxxxxx 100 0.1736%
Xxxxxxx X. Bitters 100 0.1736%
Xxxxxxx X. Xxxxx 100 0.1736%
Xxxxx Xxxxx Xxxxxxx 1360 2.3612%
Xxxxxxx/Xxxxx Xxxxxxx 4030 6.9968%
Xxxxxx X. Xxxxx 175 0.3038%
Xxxx X. Xxxxx 1000 1.7362%
Xxxx/Xxxxxxxx Xxxxx 808 1.4028%
Xxxxxx X. Xxxx 1000 1.7362%
Xxxxxx/Xxxxxxx Xxxx 1109 1.9254%
Xxxxxxx Xxxxxxxxx 1000 1.7362%
Xxxxxxx/Xxxx Xxxxxxxxx 1109 1.9254%
Xxxxxxx X. Xxxxx 1000 1.7362%
Xxxxxxx/Xxxxxxx Xxxxx 808 1.4028%
Xxxx X. Xxxxx 1450 2.5174%
Xxxx/Xxxxxxx Xxxxx 69 0.1198%
Xxxxxxx X. Xxxxx Trust 27 0.0469%
Reklaw and Co. 4477 7.7728%
Xxxxxxxx Xxxxxxx Xxxxx 703 1.2205%
H. Xxxx Xxxxx 703 1.2205%
Xxxxxxxx X. Xxxxx 703 1.2205%
Xxxx Xxxxxxx 703 1.2205%
Xxxxxxx Xxxx Xxxxx 703 1.2205%
Xxxxxx X. Xxxxx 703 1.2205%
Xxxxxx Xxxxx Xxxxxx 703 1.2205%
Xxxxxx X. Xxxxx 703 1.2205%
Xxxxx Xxxxx Xxxxxxxxx 3059 5.3109%
Xxxxx Xxxxxxxxx 1600 2.7779%
Xxxxx Xxx X. Xxxxxx 1600 2.7779%
Xxxxx X. Xxxxxxxx 1600 2.7779%
Xxxxx X. Xxxxxxxxx 1450 2.5174%
Xxxxx/Xxxxxxxxx Xxxxxxxxx 150 0.2604%
C-1
26
Exhibit C
Xxxxx Companies, Inc.
NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES SHARES
------------ ------ ------
Invo, L.C. (Xxx/Xxxxxx Xxxx) 3387 5.8804%
Xxxxx Xxxxxx Xxxx 1140 1.9792%
Xxxx Xxxxx Xxxx 745 1.2934%
Xxxxxx X. Xxxx 82 0.1424%
Xxxx Xxxx for Xxx X. Xxxx 81 0.1406%
Xxxx Xxxx for Xxxxx Xxxx 81 0.1406%
Xxxxx Xxxxxx Xxxx 517 0.8976%
Xxx Xxxx Xxxxx 1259 2.1858%
J. Xxxxxxx Xxxx 124 0.2153%
X. Xxxxxxx/Xxxxxxxxx Xxxx 517 0.8976%
Xxxxxxxxx Xxxx Xxxxxxx 1107 1.9219%
Xxxxxxxxx Xxxx Xxxxxxxxxxx 887 1.5400%
Xxxxxx Xxxxx Xxxxxxx 5568 9.6670%
B. Xxxxx Xxxxxxx 945 1.6407%
Xxxx Xxxxxx Xxxxxxx 1010 1.7535%
A. Xxx Xxxxxxx 945 1.6407%
Xxxxxx X. for Xxxx Xxxxxxx 1160 2.0140%
Total 57598
Total shares 57598
C-2
27
Exhibit D
X. X. Xxxxx & Co.
NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES SHARES
------------ ------ ------
W. Xxxxxxx Xxxxx 4580 4.8443%
Xxxx X. Xxxxx 755 0.7986%
Xxxxxxx X. Xxxxx 1375 1.4543%
Xxxxxxx/Xxxxxxxx Xxxxx 925 0.9784%
Xxxxxxx Xxxxx Trust 150 0.1587%
Xxxxxxxx Xxxxx Trust 150 0.1587%
Xxxxxxx Xxxxx 100 0.1058%
Xxxx Xxxxxx 100 0.1058%
Xxxxxx Xxxxxxx 100 0.1058%
Xxxxxxx X. Bitters 100 0.1058%
Xxxxxxx X. Xxxxx 100 0.1058%
Xxxxx Xxxxx Xxxxxxx 400 0.4231%
Xxxxxxx/Xxxxx Xxxxxxx 300 0.3173%
Xxxxxx X. Xxxxx Marital Trust 1470 1.5548%
Xxxx X. Xxxxx 1115 1.1793%
Xxxx/Xxxxxxxx Xxxxx 610 0.6452%
Xxxxxx X. Xxxx 1300 1.3750%
Xxxxxx/Xxxxxxx Xxxx 25 0.0264%
Xxxxxxx Xxxxxxxxx 1065 1.1265%
Xxxxxxx/Xxxx Xxxxxxxxx 360 0.3808%
Xxxxxxx X. Xxxxx 1065 1.1265%
Xxxxxxx/Xxxxxxx Xxxxx 610 0.6452%
Xxxx X. Xxxxx 1190 1.2587%
Xxxx/Xxxxxxx Xxxxx 370 0.3914%
Xxxxxxx X. Xxxxx Trust 75 0.0793%
Reklaw and Co. 30 0.0317%
Xxxxxxxx Xxxxxxx Xxxxx 1035 1.0947%
H. Xxxx Xxxxx 117 0.1238%
Xxxx.Xxxxxx Xxxxx 450 0.4760%
Xxxxxxx X. Xxxxx 78 0.0825%
Elisabeth Xxxxxx X'Xxxxx 78 0.0825%
Xxxxxx Xxxxxx Xxxxx 78 0.0825%
Xxxxx Xxxx Xxxxx 78 0.0825%
Xxxxxxx Xxxxx Xxxxx 78 0.0825%
Xxxxxxxx Xxxx Xxxxx 78 0.0825%
Xxxxxxxx X. Xxxxx 585 0.6188%
Marietta/Xxxxxx Xxxxx 450 0.4760%
Xxxx Xxxxxxx 585 0.6188%
Xxxx/Xxxx Xxxxxxx 450 0.4760%
D-1
28
Exhibit D
X. X. Xxxxx & Co.
NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES SHARES
------------ ------ ------
Xxxxxxx Xxxx Xxxxx 585 0.6188%
Xxxxxxxx Xxxxx Xxxxx 225 0.2380%
Xxxxx Xxxxxx Xxxxx 225 0.2380%
Xxxxxx X. Xxxxx 885 0.9361%
Xxxxxx/Xxxxxx Xxxxx 150 0.1587%
Xxxxxx Xxxxx Xxxxxx 1035 1.0947%
Xxxxxx X. Xxxxx 1035 1.0947%
Xxxxx Xxxxx Xxxxxxxxx 2090 2.2106%
Xxxxx X. Xxxxxxxxx 250 0.2644%
Invo, L.C. (Xxx/Xxxxxx Xxxx) 2330 2.4645%
Xxxxx Xxxxxx Xxxx 10 0.0106%
Xxxxxx Xxxxx Xxxxxxx 2320 2.4539%
B. Xxxxx Xxxxxxx 5 0.0053%
Xxxx Xxxxxx Xxxxxxx 5 0.0053%
A. Xxx Xxxxxxx 5 0.0053%
Xxxxxx X. for Xxxx Xxxxxxx 5 0.0053%
Xxxxx Xxxxx Xxxxx 1027 1.0863%
Xxxxxx Xxxxx Xxxxx 100 0.1058%
Xxxxx X. Xxxxxxx 538 0.5690%
Xxxxx X. Xxxxxxx 205 0.2168%
Xxxxxxx Xxxxxx 607 0.6420%
Xxxxxxx X. Xxxxxx 135 0.1428%
Xxxx X. Xxxxxxx 547 0.5786%
Xxxxx X. Xxxxxxx 195 0.2063%
Xxx X. Xxxxx Trust 3150 3.3318%
Hal Xxxxxxx Xxxxx 500 0.5289%
Xxxxx Xxxxxx Xxxxx 10 0.0106%
Xxxxxxx/Xxxxxxx Xxxxx 490 0.5183%
Xxx Xxxxxxxx Xxxxx 500 0.5289%
Xxxxxx X. Xxxxx 50 0.0529%
Xxxxxx X. Xxxxx Family Trust 3100 3.2789%
Xxxxx Xxxxx Xxxxx 500 0.5289%
Xxxxxx X. Xxxxxx 500 0.5289%
Xxxxx X. Xxxxx 500 0.5289%
Xxxxx Xxxxx Family Trust 2075 2.1947%
Xxxxx Xxxxx Family Trust 414 0.4379%
Xxxxx Xxxxx Trust 1476 1.5612%
Xxxxxxx X. Xxxxxxxx 135 0.1428%
Xxxxxxx X. Xxxxxx 135 0.1428%
D-2
29
Exhibit D
X. X. Xxxxx & Co.
NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES SHARES
------------ ------ ------
Xxxxxxx X. Xxx 135 0.1428%
Xxxxxx X. Xxxxx Trust 2505 2.6496%
XxXxx Xxxxxxx for Xxxxxx X. 50 0.0529%
XxXxx Xxxxxxx for Rixa S. 50 0.0529%
XxXxx Xxxxxxx for Xxxxxxx X. 50 0.0529%
XxXxx Xxxxxxx for Xxxxxxxx X. 50 0.0529%
XxXxx Xxxxxxx for Xxxxxxx X. 50 0.0529%
Xxxx X. Xxxxx 250 0.2644%
Xxxxx Xxxxx Xxxxx 50 0.0529%
Xxxxx Xxxxx for Xxxx X. Xxxxx 50 0.0529%
Xxxxx Xxxxx for Xxxxxx Xxxxx 50 0.0529%
Xxxxx Xxxxx for Xxxxxxx Xxxxx 50 0.0529%
Xxxxx Xxxxx for Xxxxxxx Xxxxx 50 0.0529%
Xxxxxxx Xxxxx Xxxxxxx 150 0.1587%
Xxxxxxx Xxxxxxx for Xxxxx X. 50 0.0529%
Xxxxxxx Xxxxxxx for Xxx X. 50 0.0529%
Xxxx Xxxxx Xxxxx 250 0.2644%
Xxxxx X. Xxxxxxx 250 0.2644%
Don Xxxxx Xxxxx 4570 4.8337%
Xxxxxx/Xxxxxxx Xxxx Trust 3290 3.4799%
Totals 62609
Total Shares 94544
D-3
30
Exhibit E
Geneva Rock Products, Inc.
NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES SHARES
------------ ------ ------
W. Xxxxxxx Xxxxx 3 0.0138%
X. Xxxxxxx/Xxxx Xxxxx 575 2.6374%
Xxxx X. Xxxxx 443 2.0319%
Xxxxxxx X. Xxxxx 60 0.2752%
Xxxxxx X. Xxxxx 620 2.8438%
Xxxxxx X. Xxxxx Marital Trust 14 0.0642%
Xxxx X. Xxxxx 143 0.6559%
Xxxx/Xxxxxxxx Xxxxx 37 0.1697%
Xxxxx Xxxxx 15 0.0688%
Xxxx Xxxxx 15 0.0688%
Xxxxxxx Xxxxx 15 0.0688%
Xxxxxxx X. Xxxxx 15 0.0688%
Xxxx Xxxxx for Xxxx Xxxxx 15 0.0688%
Xxxx Xxxxx for Xxxxx Xxxxx 15 0.0688%
Xxxx Xxxxx for Xxxxx Xxxxx 15 0.0688%
Xxxx Xxxxx for Xxxxxx Xxxxx 15 0.0688%
Xxxxxx X. Xxxx 143 0.6559%
Xxxxxx/Xxxxxxx Xxxx 37 0.1697%
Xxxxxx Xxxx for Xxxxx Xxxx 15 0.0688%
Xxxxxx Xxxx for Xxxxxxx Xxxx 15 0.0688%
Xxxxxx Xxxx for Xxxxxx Xxxx 15 0.0688%
Xxxxxx Xxxx for Xxxxx Xxxx 15 0.0688%
Xxxxxxx Xxxxxxxxx 143 0.6559%
Xxxxxxx/Xxxx Xxxxxxxxx 37 0.1697%
Xxxxxxx X. for Xxxxxx Xxxxxxxxx 15 0.0688%
Xxxxxxx X. for Xxxxxxxxx Xxxxxxxxx 15 0.0688%
Xxxxxxx X. for Xxxxx Xxxxxxxxx 15 0.0688%
Xxxxxxx X. for Xxxxx Xxxxxxxxx 15 0.0688%
Xxxxxxx X. for Xxxxxxxx Xxxxxxxxx 15 0.0688%
Xxxxxxx X. for Xxxxxxxx Xxxxxxxxx 15 0.0688%
Xxxxxxx X. for Xxxxxxx Xxxxxxxxx 15 0.0688%
Xxxxxxx X. Xxxxx 186 0.8531%
Xxxxxxx/Xxxxxxx Xxxxx 37 0.1697%
Xxxxxxx Xxxxx for Xxxxxxx Xxxxx 00 0.0000%
Xxxxxxx Xxxxx for Xxxxx Xxxxx 15 0.0688%
Xxxxxxx Xxxxx for Xxxxxx Xxxxx 15 0.0688%
Xxxxxxx Xxxxx for Katie 15 0.0688%
Xxxx X. Xxxxx 185 0.8485%
Xxxx/Xxxxxxx Xxxxx 37 0.1697%
E-1
00
Xxxxxxx X
Xxxxxx Xxxx Products, Inc.
NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES SHARES
------------ ------ ------
Xxxx Xxxxx for Xxxxxxxx Xxxxx 15 0.0688%
Xxxx Xxxxx for Xxxxx Xxxxx 15 0.0688%
Xxxxxxx X. Xxxxx Trust 26 0.1193%
Reklaw and Co. 3 0.0138%
Xxxxxxxx Xxxxxxx Xxxxx 187 0.8577%
H. Xxxx Xxxxx 187 0.8577%
Marietta/Xxxxxx Xxxxx 187 0.8577%
Xxxx/Xxxx Xxxxxxx 187 0.8577%
Xxxxxxx Xxxx Xxxxx 187 0.8577%
Xxxxxx X. Xxxxx 187 0.8577%
Xxxxxx Xxxxx Xxxxxx 187 0.8577%
Xxxxxx X. Xxxxx 187 0.8577%
Xxxxx Xxxxx Xxxxxxxxx 2 0.0092%
Xxx Xxxxx Xxxx 2 0.0092%
Xxxxxx Xxxxx Xxxxxxx 1 0.0046%
A. Xxx Xxxxxxx 1 0.0046%
Xxxxx Xxxxx Xxxxx 150 0.6880%
Xxxxxxxxx Xxxxx Xxxxxxxxx 42 0.1926%
Xxxxx X. Xxxxxxx 81 0.3715%
Xxxxx X. Xxxxxxx 12 0.0550%
Xxxxxxx Xxxxxx 38 0.1743%
Xxxxxxx X. Xxxxxx 12 0.0550%
Xxxx X. Xxxxxxx 81 0.3715%
Xxxxx X. Xxxxxxx 12 0.0550%
Xxxxx Xxxxx Xxxxxxx 43 0.1972%
Xxx X. Xxxxx Trust 879 4.0317%
Hal Xxxxxxx Xxxxx 25 0.1147%
Xxxxx Xxxxxx Xxxxx 25 0.1147%
Xxx Xxxxxxxx Xxxxx 25 0.1147%
Xxxxxx X. Xxxxx 304 1.3944%
Xxxxxx/Xxxxxxx Xxxxx 650 2.9814%
Xxxxx Xxxxx 180 0.8256%
Xxxxx Xxxxx Family Trust 123 0.5642%
Xxxxxx/Xxxxxxxx Xxxxx 503 2.3071%
Don Xxxxx Xxxxx 303 1.3898%
Don Xxxxx/Xxxxxxx Xxxxx 410 1.8806%
Xxxxxx/Xxxxxxx Xxxx Trust 303 1.3898%
Xxxxxx/Xxxxxxxx Xxxxxxxxxxxx 10 0.0459%
Xxxx/Xxx Xxxxx 10 0.0459%
E-2
00
Xxxxxxx X
Xxxxxx Xxxx Products, Inc.
NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES SHARES
------------ ------ ------
Xxxxxx Xxxxxx Family Trust 669 3.0685%
Totals 9496
Total Shares 21802
E-3
33
Exhibit F
Utah Service, Inc.
NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES SHARES
------------ ------ ------
W. Xxxxxxx Xxxxx 161 2.9743%
Xxxxxxx X. Xxxxx 22 0.4064%
Xxxxxx X. Xxxxx Marital Trust 53 0.9791%
Xxxx/Xxxxxxxx Xxxxx 21 0.3880%
Xxxxxx/Xxxxxxx Xxxx 21 0.3880%
Xxxxxxx/Xxxx Xxxxxxxxx 21 0.3880%
Xxxxxxx/Xxxxxxx Xxxxx 21 0.3880%
Xxxx/Xxxxxxx Xxxxx 21 0.3880%
Xxxxxxx X. Xxxxx 14 0.2586%
Reklaw and Co. 11 0.2032%
Xxxxxxxx Xxxxxxx Xxxxx 13 0.2402%
H. Xxxx Xxxxx 13 0.2402%
Xxxxxxxx X. Xxxxx 13 0.2402%
Xxxx Xxxxxxx 13 0.2402%
Xxxxxxx Xxxx Xxxxx 13 0.2402%
Xxxxxx X. Xxxxx 13 0.2402%
Xxxxxx Xxxxx Xxxxxx 13 0.2402%
Xxxxxx X. Xxxxx 13 0.2402%
Xxxxx Xxxxx Xxxxxxxxx 248 4.5816%
Xxx X. Xxxx Family Trust 192 3.5470%
Xxxxxx X. Xxxx Family Trust 129 2.3832%
Invo, L.C. (Xxx/Xxxxxx Xxxx) 189 3.4916%
Xxxxx Xxxxxx Xxxx 379 7.0017%
Xxxxxx Xxxxx Xxxxxxx 300 5.5422%
Xxxxx X. Xxxxxxx 86 1.5888%
B. Xxxxx Xxxxxxx 5 0.0924%
Xxxx Xxxxxx Xxxxxxx 5 0.0924%
A. Xxx Xxxxxxx 5 0.0924%
Xxxxxx X. for Xxxx Xxxxxxx 5 0.0924%
Xxxxxxxxx Xxxxx Xxxxxxxxx 24 0.4434%
Xxxxxxx Xxxxxx 23 0.4249%
Xxxx X. Xxxxxxx 23 0.4249%
Xxxxx Xxxxx Xxxxxxx 23 0.4249%
Caroliva Xxxxx 23 0.4249%
Xxxxx Xxxxxx Xxxxx 23 0.4249%
Xxxxx Xxxxx 23 0.4249%
Xxxxxx Xxxxx 32 0.5912%
Xxxxxx Xxxxx 32 0.5912%
Xxxxxx Xxxxx 23 0.4249%
F-1
34
Exhibit F
Utah Service, Inc.
NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES SHARES
------------ ------ ------
Xxxxxxx Xxxxx 32 0.5912%
Xxx X. Xxxxx Trust 192 3.5470%
Xxxxxx X. Xxxxx 191 3.5285%
Xxxxx Xxxxx Family Trust 191 3.5285%
Xxxxxxxx Xxxxx 191 3.5285%
Don Xxxxx Xxxxx 192 3.5470%
Xxxxxx/Xxxxxxx Xxxx Trust 191 3.5285%
Xxxxxxx Xxxx 65 1.2008%
Xxxxxx X. Xxxx 60 1.1084%
Payfryman Trust Lorus 17 0.3141%
Xxxxx Xxxxx Xxxxxx 33 0.6096%
Max/Xxx Xxxxx 17 0.3141%
J. Xxxxxxx Xxxxxx Trust 17 0.3141%
X. XxXxx Weight 64 1.1823%
Totals 3715
Total Shares 5413
F-2
35
Exhibit G
Beehive Insurance Agency, Inc.
NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES SHARES
------------ ------ ------
W. Xxxxxxx Xxxxx 288 1.3403%
X. Xxxxxxx/Xxxx Xxxxx 1500 6.9810%
Xxxxxxx Xxxxx Trust 10 0.0465%
Xxxxxxxx Xxxxx Trust 490 2.2804%
Xxxxx Xxxxx Xxxxxxx 200 0.9308%
Xxxxxx X. Xxxxx 1690 7.8652%
Xxxx X. Xxxxx 10 0.0465%
Xxxx/Xxxxxxxx Xxxxx 58 0.2699%
Xxxxxx/Xxxxxxx Xxxx 57 0.2653%
Xxxxxxx/Xxxx Xxxxxxxxx 57 0.2653%
Xxxxxxx/Xxxxxxx Xxxxx 58 0.2699%
Xxxx/Xxxxxxx Xxxxx 58 0.2699%
Xxxxxxx X. Xxxxx Trust 16 0.0745%
Reklaw and Co. 288 1.3403%
Xxxxxxxx Xxxxxxx Xxxxx 123 0.5724%
H. Xxxx Xxxxx 123 0.5724%
Xxxxxxxx X. Xxxxx 123 0.5724%
Xxxx Xxxxxxx 123 0.5724%
Xxxxxxx Xxxx Xxxxx 123 0.5724%
Xxxxxx X. Xxxxx 123 0.5724%
Xxxxxx Xxxxx Xxxxxx 123 0.5724%
Xxxxxx X. Xxxxx 123 0.5724%
Xxxxx Xxxxx Xxxxxxxxx 689 3.2066%
Xxx X. Xxxx Family Trust 688 3.2019%
Xxxxxx Xxxxx Xxxxxxx 269 1.2519%
Xxxxx X. Xxxxxxx 5 0.0233%
Blake/Xxxxxx Xxxxxxx 400 1.8616%
B. Xxxxx Xxxxxxx 20 0.0931%
Xxxx Xxxxxx Xxxxxxx 5 0.0233%
A. Xxx Xxxxxxx 5 0.0233%
Xxxxxx X. for Xxxx Xxxxxxx 5 0.0233%
Xxxxx Xxxxx Xxxxx 425 1.9779%
Melza Xxxx Xxxxxxx 425 1.9779%
Xxxxxx Xxxxxx Xxxxx 425 1.9779%
Xxx X. Xxxxx Trust 916 4.2630%
Xxxxxx X. Xxxxx 116 0.5399%
Norman/Xxxxxxx Xxxxx 1250 5.8175%
Xxxxx Xxxxx Xxxxx 100 0.4654%
Xxxxxx X. Xxxxxx 100 0.4654%
G-1
36
Exhibit G
Beehive Insurance Agency, Inc.
NUMBER OF PERCENTAGE OF
SHAREHOLDERS SHARES SHARES
------------ ------ ------
Xxxxx X. Xxxxx 100 0.4654%
Xxxxx Xxxxx Family Trust 417 1.9407%
Xxxxxx/Xxxxxxxx Xxxxx 417 1.9407%
Don Xxxxx Xxxxx 417 1.9407%
Xxxxxx/Xxxxxxx Xxxx Trust 417 1.9407%
Xxxxxx Xxxxxx Family Trust 500 2.3270%
Payfryman Trust Lorus 500 2.3270%
J. Xxxxxxx Xxxxxx Trust 3000 13.9619%
W. Xxxxxxx Xxxx 200 0.9308%
Xxxxxx, Inc. 212 0.9866%
Totals 17787
Total Shares 21487
G-2
