BAADS Merger Transaction Summary
Background
Since its formation in 1990, the Bay Area Association of Disabled Sailors (the “Association”) has been operating as a California unincorporated association within the meaning of Title 3, Part 1, Section 18035 of the California Corporations Code. The Association’s officers and Board of Directors have decided that it would be in the best interest of the Association to convert the Association into a California public benefit corporation. Converting to a corporate structure would provide the Association’s officers, directors and members with greater protection under applicable law and would streamline the Corporation’s internal and external processes.
To accomplish this conversion, a new California public benefit corporation (the “Corporation”) will be formed and the Association will be merged with and into the Corporation (the “Merger”), with the Corporation acting as the surviving entity that will carry on the business of the organization.
Summary of the Key Terms of the Merger
Parties to the Merger. The names and places of incorporation of the corporations planning to merge pursuant to this Agreement are as follows:
- Bay Area Association of Disabled Sailors, a California unincorporated association; and
- BAADS, Inc., a newly-formed California public benefit corporation.
Effective Time. The Merger will become effective and the separate existence of the Association will cease at the time the Agreement of Merger and other required filings are filed with the Secretary of State of the State of California (the “Effective Time”).
Surviving Corporation. The Corporation shall be the surviving corporation of the Merger. At the Effective Time, all the property, rights, privileges and powers of the Association will vest in the Corporation, and all debts, liabilities and duties of the Association shall become the debts, liabilities and duties of the Corporation.
Treatment of Membership Interests. All membership interests in the Association as of immediately prior to the Effective Time will be exchanged for membership interests in the Corporation on a one-for-one basis without payment of any other consideration therefor.
Principal Transaction Documents for the Merger
The key documents required for the completion of the Merger are as follows:
- Agreement and Plan of Merger: Agreement between the Association and Corporation to complete the Merger.
- Agreement of Merger and other Filings: Filings that must be made with the Secretary of State of the State of California to effect the Merger.
- Member Consent: Written consent of the members of the association approving the Merger.
Bylaws Revisions
The post-merger entity will operate under the Bylaws of the Corporation, which are similar to the current bylaws of the Association other than the following key changes:
- Allows for provision of services in lieu of dues.
- Changes size of Board of Directors from 15 to 11.
- Simplifies process for filling vacancies on the Board of Directors.
- Restructures Board Committees.
- Simplifies slate of officers.
- Adds limitations for certain loans and self-dealing transactions.