FEBRUARY 2006

MBNA BofA Merger Information

MBNA - Bank of America Merger

From the Treasurer's List

This is one of what is becoming a popular form of merger, stock plus cash.
It is a bit complicated to handle in the accounting software. If the total
value received in the merger is more than your cost basis in KRB, some or all of
the cash will be taxable capital gain and some of the cash may be return of
capital. If the total value received in the merger is less than your cost
basis in KRB, then the cash is all return of capital. Jim Thomas has created a
spreadsheet that will do the calculations for you and generate the appropriate
entries. You can find the spreadsheet here:

http://www.nwlink.com/~jimt075/StockCashMerger.xls

Please read the instructions at the top.

First, enter erase the example share purchase data. Note that the sample is
a complex example of dividend reinvestment. You need to erase the
information in the first three columns of rows 31-65.

Second, enter your own share purchase data. If you only purchased KRB once
and didn't reinvest dividends you'll only have a single entry to make (on row
31).

Third, look at the "Club Accounting" sheet (notice the "Data" and "Club
Accounting" tabs at the bottom of the Excel window). Verify the numbers
indicated (three vs. your broker statement and two vs. the club accounting software).
Then elect your software in cell D8 (use the little arrow to the right of
that cell). You'll be shown the transactions you'll need to enter for that
software.