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Company Background and Basis of Presentation
9 Months Ended
Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Company Background and Basis of Presentation
Company Background and Basis of Presentation
TRC Companies, Inc., through its subsidiaries (collectively, the "Company"), provides integrated engineering, consulting, and construction management services. Its project teams help its commercial and governmental clients implement environmental, power, infrastructure and oil and gas related projects from initial concept to delivery and operation. The Company provides its services almost entirely in the United States of America.
The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been omitted pursuant to those rules and regulations, but the Company's management believes that the disclosures included herein are adequate to make the information presented not misleading. The condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries in which a controlling interest is maintained. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2016.
Recent Developments
On March 30, 2017, the Company. entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, Bolt Infrastructure Parent, Inc., a Delaware corporation ("Parent"), and Bolt Infrastructure Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Parent ("Merger Sub"), pursuant to which, and on the terms and subject to the conditions thereof, among other things, Merger Sub will merge with and into the Company (the "Merger"), with the Company continuing as the surviving corporation and as a wholly owned subsidiary of Parent. Parent and Merger Sub were formed by affiliates of New Mountain Partners IV, L.P., a fund affiliated with New Mountain Capital, L.L.C. ("New Mountain Capital").
The Merger Agreement provides that at the effective time of the Merger (the "Effective Time"), each share of common stock, par value $0.10 per share, of the Company issued and outstanding immediately prior to the Effective Time (other than shares (i) owned by the Company, Parent or Merger Sub or (ii) held by a stockholder who is entitled to, but did not vote in favor of the Merger (or consent thereto in writing) and is entitled to demand and properly demands appraisal of such shares) will be automatically converted into the right to receive cash in an amount per share (subject to any applicable withholding tax) equal to $17.55 per share, without interest (the "Merger Consideration"). The Merger Agreement contemplates that the Merger will be effected pursuant to Section 251 of the Delaware General Corporation Law.
In addition, immediately prior to the Effective Time, unless otherwise agreed between a participant and Parent, each outstanding unvested and unexercised Company stock option will become immediately vested and exercisable in full and, at the Effective Time, each outstanding Company stock option, whether or not vested, that remains outstanding and unexercised as of immediately prior to the Effective Time (including each stock option that becomes vested and exercisable pursuant to the previous clause) will be canceled and converted into the right to receive an amount in cash, without interest and less the amount of any tax withholding, equal to the product of the excess, if any, of the Merger Consideration over the exercise price of such option and the number of shares of Company common stock underlying such option. Further, at the Effective Time, unless otherwise agreed between a participant and Parent, each restricted stock award, restricted stock unit and performance stock unit (the "Restricted Awards"), under any Company equity plan will become immediately vested (and, in the case of performance stock units, such vesting will be in the amounts corresponding to actual achievement of applicable performance goals thereto, which in the event that the closing of the Merger shall occur prior to June 30, 2017, will be determined in good faith by the Compensation Committee of the Board, by assuming achievement of performance goals for any portion of the applicable performance period that has not been completed as of the closing of the Merger taking into account historical levels of performance with respect to the applicable performance goals) and all restrictions thereupon shall lapse, and such Restricted Awards will be canceled in exchange for and converted into the right to receive an amount in cash, without interest and less the amount of any tax withholding, equal to the product of the number of shares of Company common stock subject to such Restricted Award and the Merger Consideration following the Effective Time.
The Board of Directors of the Company (the "Board") has unanimously (1) determined that the Merger and the other transactions contemplated by the Merger Agreement are advisable and fair to, and in the best interests of, the Company and its stockholders, (2) adopted, approved and declared advisable the execution, delivery and performance of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Merger and (3) resolved to recommend that the Company's stockholders approve the Merger Agreement and the Merger and other transactions contemplated by the Merger Agreement.
Stockholders of the Company will be asked to vote on the approval of the Merger Agreement and the Merger at a special stockholders meeting that will be held on a date to be announced. The closing of the Merger is subject to various closing conditions, including (1) approval of the Merger Agreement by the affirmative vote by stockholders of outstanding shares of common stock of the Company representing at least a majority of all votes entitled to be cast thereupon by stockholders of the outstanding Company common stock (the "Requisite Stockholder Approval"), (2) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR ACT"), (3) the absence of any statute, rule or regulation prohibiting or making illegal the consummation of the merger or order or injunction preventing the consummation of the Merger, (4) the accuracy of each party's representations and warranties (subject to certain materiality qualifiers), (5) each party's performance in all material respects of its obligations under the Merger Agreement and (6) no Material Adverse Effect (as defined in the Merger Agreement) having occurred with respect to the Company. The Merger is not subject to any financing condition. On April 25, 2017, the U.S. Federal Trade Commission granted early termination of the 30-day waiting period under the HSR Act, with respect to the proposed Merger. The grant of early termination has the effect of satisfying the HSR Act condition under the Merger Agreement.
The Merger Agreement contains customary representations, warranties and covenants of the parties. The Company has agreed, subject to the terms of the Merger Agreement, to various covenants and agreements, including, among others: (i) to continue to conduct its and its subsidiaries business in the ordinary course during the period between the execution of the Merger Agreement and the Effective Time and not to engage in certain kinds of transactions during this period; (ii) to cooperate in seeking regulatory approvals; (iii) to promptly call a special stockholders meeting to vote on the Merger Agreement and the Merger; and (iv) to cease all existing, and not to solicit or initiate any additional, discussions with third parties regarding other proposals to acquire the Company and to certain restrictions on its ability to respond to such proposals, subject to fulfillment of certain fiduciary requirements of the Board.
The Merger Agreement contains certain customary termination rights for the Company and Parent. Subject to certain limitations, the Merger Agreement may be terminated by either Parent or the Company if (i) agreed to in writing by Parent and the Company; (ii) the Merger is not consummated on or before July 31, 2017; (iii) the Merger becomes subject to a final, non-appealable order, decree or ruling in each case permanently restraining, enjoining or otherwise prohibiting the Merger or the other transactions contemplated by the Merger Agreement; (iv) the Requisite Stockholder Approval is not obtained following a vote of stockholders taken thereon; or (v) there has been a breach of any of the other party's representations, warranties, covenants or agreements contained in the Merger Agreement such that the applicable condition to closing would not be satisfied. In addition, and also subject to certain limitations, (a) Parent may terminate the Merger Agreement prior to obtaining the Requisite Stockholder Approval, if a Change of Recommendation (as defined in the Merger Agreement) has occurred or if the Company has otherwise materially breached its obligations relating to the solicitation of proposals from third parties, and (b) subject to the Company's compliance with certain provisions contained in the Merger Agreement, prior to the Requisite Stockholder Approval, the Company may terminate the Merger Agreement to enter into an acquisition agreement with respect to a Superior Proposal (as defined in the Merger Agreement).
Upon termination of the Merger Agreement under specified circumstances, including with respect to the Company's entry into an agreement with respect to a Superior Proposal, the Company will be required to pay Parent a termination fee of $19,380.

The foregoing description of the Merger Agreement is not complete and is qualified in its entirety by reference to the Merger Agreement, which is attached as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 31, 2017. Additional information about the Merger and the Merger Agreement is set forth in the Company’s Current Reports on Form 8-K filed with the SEC on March 31, 2017, April 19, 2017 and April 26, 2017, and in the Company’s preliminary proxy statement filed with the SEC on April 25, 2017.