AGREEMENT AND PLAN OF
MERGER
This AGREEMENT AND
PLAN OF MERGER (this “ Agreement ”) is
dated as of August 3, 2009 by and between Energy West,
Incorporated, a Montana corporation (“ Energy
West ”), Energy West Merger Sub, Inc., a Montana
corporation (“ MergerSub ”), and Energy,
Inc., a Montana corporation (“ Holdco
”).
WHEREAS, the Board
of Directors of Energy West deems it advisable to reorganize Energy
West to create a holding company structure;
WHEREAS, Energy
West has an authorized capitalization consisting of
(i) 15,000,000 shares of Common Stock, par value $0.15 per
share (“ Energy West Common Stock ”), of
which 4,353,585 shares are issued and outstanding as of May 1,
2009, and (ii) 1,500,000 shares of Cumulative Preferred Stock,
par value $0.15 per share, of which no shares are issued and
outstanding as of May 1, 2009;
WHEREAS, MergerSub
has an authorized capitalization consisting of 100 shares of common
stock (“ MergerSub Stock ”), all of which
shares have been issued and are outstanding and owned beneficially
and of record by Holdco;
WHEREAS, Holdco
has an authorized capitalization consisting of (i) 15,000,000
shares of Common Stock, par value $0.15 per share (“
Holdco Common Stock ”), of which 100 shares are
issued and outstanding as of July 6, 2009 and owned
beneficially and of record by Energy West, and (ii) 1,500,000
shares of Preferred Stock, par value $0.15 per share, of which no
shares are issued and outstanding as of July 6, 2009;
and
WHEREAS, the
Boards of Directors of the respective parties hereto deem it
advisable to merge MergerSub into Energy West (the “
Merger ”) in accordance with the Montana
Business Corporation Act, this Agreement and the Articles of Merger
(the “ Articles ”), whereby the holders
of shares of Energy West Common Stock will receive shares of Holdco
Common Stock and Energy West will thereby become a wholly-owned
subsidiary of Holdco.
NOW, THEREFORE, in
consideration of the premises and the representations, warranties
and agreements herein contained, the parties hereto agree that the
Merger will occur, and that the terms, conditions and mode of
carrying the Merger into effect will be as follows:
(a) Subject
to and in accordance with the provisions of this Agreement, the
Articles shall be executed by each of Energy West and MergerSub and
thereafter delivered to the Secretary of State of the State of
Montana for filing, as provided in Section 35-1-816 of the
Montana Business Corporation Act. The Merger shall become effective
upon the filing of the Articles with the Montana Secretary of State
(the “ Effective Time ”). At the
Effective Time, the separate existence of MergerSub shall cease and
MergerSub shall be merged with and into
Energy West
(MergerSub and Energy West being sometimes referred to herein as
the “ Constituent Entities ” and Energy
West, the entity designated in the Articles as the surviving
entity, being sometimes referred to herein as the “
Surviving Entity ”).
(b) Prior to
and after the Effective Time, Holdco, Energy West and MergerSub,
respectively, shall take all such action as may be necessary or
appropriate in order to effectuate the Merger. Holdco shall issue
the shares of Holdco Common Stock that the holders of Energy West
Common Stock will be entitled to receive as provided in
Article II hereof. If at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes
of this Agreement and to vest the Surviving Entity with full title
to all properties, assets, rights, approvals, immunities and
franchises of either of the Constituent Entities, then the officers
and directors of each of the Constituent Entities as of the
Effective Time shall take all such further action.
(c) This
Agreement is intended to constitute a “plan of
reorganization” within the meaning of Treasury
Regulation Section 1.368-2(g). Each party hereto shall
use its commercially reasonable efforts to cause the Merger to
qualify, and shall not knowingly take any actions or cause any
actions to be taken which could reasonably be expected to prevent
the Merger from qualifying, as a reorganization within the meaning
of Section 368(a) of the Code.
ARTICLE II
TERMS OF CONVERSION AND EXCHANGE OF SHARES
(a) Each
share of Energy West Common Stock issued, whether or not
outstanding immediately prior to the Merger, shall be changed and
converted into one share of Holdco Common Stock, which shall
thereupon be issued, fully paid and nonassessable.
(b) Each
outstanding option to purchase Energy West Common Stock (an “
Energy West Stock Option ”) issued pursuant to
Energy West’s 2002 Stock Option Plan (which at the Effective
Time of the Merger will become Holdco’s 2002 Stock Option
Plan), whether vested or not vested or exercisable, shall be deemed
to constitute an option (a “ Holdco Stock
Option ”) to acquire, on the same terms and
conditions as were applicable under such Energy West Stock Option
(including the price per share), the same number of shares of
Holdco Common Stock as the holder of such Energy West Stock Option
would have been entitled to receive upon the exercise of such
Energy West Stock Option.
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