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Revising employee benefit plans with the objective of adopting unified plans for Charity AB’s employees without diminishing the overall benefits being offered to existing employees. [FAS 164, paragraph A13(f), sequence]

958-805-55-13 In discussing revisions of employee benefit plans, the exploratory committee’s report notes that the committee interviewed the current chief executive officers of Charity A and Charity B and found both well qualified to serve as the chief executive officer of Charity AB. However, although both chief executive officers are in their early 60s and are eager to assist Charity AB through the initial transition period, the chief executive officer of Charity A had been contemplating retiring within the next year. The committee saw no need to open the chief executive officer search to other candidates. [FAS 164, paragraph A14, sequence 115]

958-805-55-14 During August 20X9, each of the governing boards of Charity A and Charity B tentatively approves the committee recommendations [FAS 164,











recommended transition committee. The boards also asked their respective nominating committees to make recommendations to each of their boards about the initial members to be appointed to the board of Charity AB. During October, each board approved the plan for their combination, and it was submitted to the state for approval. During November, the plan received the required state approval, and the combination became effective on January 1, 20X0, as proposed. [FAS 164, paragraph A15, sequence 116.2]

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    > > Case A: A Combination That Is a Merger

958-805-55-15 In this Case, the executive committee recommends [FAS 164, paragraph A13(a), sequence 114.1] (and each of the governing boards of Charity A and B approves) [FAS 164, paragraph A15, sequence 116.1] that to minimize costs the corporate charter of Charity A is to be retained as the charter of Charity AB. The assets and liabilities of Charity B are to be transferred to Charity AB and Charity B will cease to exist. [FAS 164, paragraph A13(a), sequence] On the date the merger becomes effective (as approved by the appropriate state official), the corporate charter will be amended to reflect the new NFP’s name and its expanded mission, which is to encompass Charity B’s research and advocacy functions as well as the charitable functions of both entities. [FAS 164, paragraph A13(b), sequence 114.1.2] Thus, in effect, both Charity A and Charity B will cease to exist in their precombination forms. [FAS 164, paragraph A13(a), sequence]

958-805-55-16 Paragraph 958-805-55-4 describes the assessments required when determining whether each of the governing bodies of the participating entities in a combination cedes control of those entities to a new NFP. On the basis of the evidence, both Charity A and Charity B participated in the process leading to the combination. Moreover, the evidence indicates that neither charity was experiencing financial difficulties or other circumstances that might allow the


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