Banner Alzheimer'S Foundation

“THE COMPENSATION OF THE CEO AND OTHER OFFICERS OF BAF IS ESTABLISHED BY Banner Health AND IS SUBJECT TO OVERSIGHT BY THE BANNER HEALTH BOARD OF DIRECTORS' COMPENSATION COMMITTEE IN THE SAME MANNER AS SUCH OVERSIGHT IS EXERCISED OVER OTHER VICE PRESIDENTS AND HIGHER EXECUTIVES OF BH. THE COMPENSATION IS WITHIN RANGES SET BY THE BH COMPENSATION AND BENEFITS DEPARTMENT BASED ON MARKET DATA. Banner Health's PROCESS TO DETERMINE COMPENSATION OF BAF IS AS FOLLOWS: Banner Health UTILIZES A COMPENSATION COMMITTEE COMPRISED OF INDEPENDENT DIRECTORS THAT EXERCISES OVERSIGHT OVER ALL ASPECTS OF THE COMPENSATION PAID TO OR FOR THE BENEFIT OF THE CEO AND ALL OTHER SENIOR EXECUTIVES OF Banner Health AND ANY OF ITS AFFILIATES AND ALL OTHER PERSONS WHO CONSTITUTE "DISQUALIFIED PERSONS" WITH RESPECT TO Banner Health UNDER CODE SECTION 4958. THE COMMITTEE: - ASSESSES ANNUALLY THE PERFORMANCE OF THE CEO - EXERCISES OVERSIGHT OVER ALL ASPECTS OF COMPENSATION FOR THE PRESIDENT AND CEO - REVIEWS AND DETERMINES THE EXECUTIVE TOTAL COMPENSATION PHILOSOPHY OF Banner Health - ESTABLISHES THE PERMISSIBLE RANGES OF COMPENSATION FOR SENIOR EXECUTIVES AND DISQUALIFIED PERSONS - REVIEWS AND APPROVES THE DESIGN OF THE COMPONENTS OF COMPENSATION FOR SENIOR EXECUTIVES AND ANY OTHER DISQUALIFIED PERSONS AND MONITORS COMPLIANCE OF Banner Health WITH THE PHILOSOPHY AND DESIGN COMPONENTS OF EXECUTIVE COMPENSATION - RECEIVES THE PRESIDENT AND CEO'S REPORT CONCERNING THE OVERALL PERFORMANCE AND DEVELOPMENT ASSESSMENT OF THE SENIOR EXECUTIVES - ACTS FOR THE BOARD IN THE ENGAGEMENT AND DIRECT OVERSIGHT OF EXTERNAL INDEPENDENT COMPENSATION CONSULTANTS ENGAGED TO PROVIDE ADVICE AND INFORMATION WITH RESPECT TO THE REASONABLENESS AND COMPETITIVENESS OF THE COMPENSATION PAID TO CEO, SENIOR EXECUTIVES AND ANY OTHER DISQUALIFIED PERSONS, WHICH CONSULTANT REPORTS DIRECTLY TO THE COMMITTEE. IN ADDITION, THE COMMITTEE HAS ADOPTED THE FOLLOWING BEST PRACTICES WITH RESPECT TO ITS EXECUTIVE COMPENSATION OVERSIGHT FUNCTION: - REVIEWS ALL INCENTIVE PLANS, BENEFIT PLANS AND PROGRAMS THAT APPLY TO EMPLOYEES AND PHYSICIANS - APPROVES CEO'S RECOMMENDATIONS AS TO THE COMPENSATION OF SENIOR EXECUTIVES - USES TALLY SHEETS SUMMARIZING ALL COMPONENTS OF THE CEO'S AND SENIOR EXECUTIVES' COMPENSATION, INCLUDING A THREE-YEAR EARNINGS HISTORY AND THE COST OF ALL COMPENSATION (INCLUDING SPECIFICALLY DEFERRED COMPENSATION) AT THE TIME THAT ANY ACTION IS TAKEN WITH RESPECT TO THE CEO'S OR SENIOR EXECUTIVES' COMPENSATION IN ORDER TO ENSURE THAT THE COMMITTEE IS FULLY INFORMED OF THE COMPLETE COMPENSATION PACKAGE BEFORE TAKING ANY SUCH ACTION - REVIEWS THE ANNUAL FORM 990 DISCLOSURES RELATING TO EXECUTIVE COMPENSATION TO ENSURE THE DISCLOSURES ACCURATELY RECONCILE TO THE COMPENSATION PACKAGES APPROVED BY THE COMMITTEE. THE COMPENSATION COMMITTEE RETAINS AN EXTERNAL INDEPENDENT COMPENSATION CONSULTING FIRM TO ASSIST THE COMMITTEE. THE COMMITTEE ENGAGES A NATIONALLY RECOGNIZED COMPENSATION CONSULTING FIRM WITH SUBSTANTIAL HEALTHCARE EXPERIENCE. THIS FIRM REVIEWED AND OPINED AS TO THE REASONABLENESS OF THE TOTAL COMPENSATION PACKAGE OF THE CEO, SENIOR EXECUTIVE MANAGEMENT, AND OTHER EXECUTIVE MANAGEMENT IDENTIFIED BY THE COMMITTEE AS POTENTIAL DISQUALIFIED PERSONS. THE COMMITTEE ANNUALLY REVIEWS THE RELATIONSHIP BETWEEN Banner Health AND EACH CONSULTANT TO ENSURE THE CONSULTANT'S INDEPENDENCE. IN CONNECTION WITH EACH SUCH EVALUATION, THE COMMITTEE REQUESTS A WRITTEN CERTIFICATION FROM EACH CONSULTANT THAT: - INCLUDES AN INDEPENDENCE ATTESTATION AFFIRMING THAT THE CONSULTANT HAS CONDUCTED ITS OWN INTERNAL ASSESSMENT AND BASED ON SUCH ASSESSMENT AND ITS INTERNAL CONTROLS, CONCLUDED THAT IT HAS PERFORMED ITS SERVICES FOR THE COMMITTEE IN AN INDEPENDENT MANNER AND IS INDEPENDENT AS DEFINED IN THE INTERMEDIATE SANCTION REGULATIONS UNDER CODE SECTION 4958 - CONFIRMS THAT THE CONSULTANT REPORTS TO THE COMMITTEE THROUGH THE CHAIR OF THE COMMITTEE AND THAT ALL CONSULTING ACTIVITY FOR BH CONDUCTED BY SUCH CONSULT”

“THE BAF BOARD OF DIRECTORS IS PRIMARILY A FUNDRAISING BOARD WITHOUT FISCAL OVERSIGHT. THE Banner Health BOARD OF DIRECTORS HAS THE BROADER AUTHORITY OVER THE BAF'S AS DESCRIBED IN THE NARRATIVE FOR PART VI, LINES 7A AND B. IN MANY, IF NOT ALL, SITUATIONS, THE BAF BOARD DELEGATES AUTHORITY DIRECTLY TO THE Banner Health CEO.”

“JERRE STEAD AND JAY STEAD - Family relationship”

“THE SOLE VOTING MEMBER OF BAF IS Banner Health, AN ARIZONA NONPROFIT CORPORATION, EXEMPT FROM TAX AS AN ENTITY DESCRIBED UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE.”

“A. Affirmative consent and approval of the member shall be required for any of the following actions: (i) adoption of a plan of liquidation or dissolution of the baf. (ii) merger, consolidation, sale, lease, mortgage, pledge, transfer or disposal of all or substantially all of the assets of the baf. (iii) repeal, modification, alteration, amendment, in whole or in part, or addition to the articles of incorporation or bylaws of the baf or adoption of new articles of incorporation or new bylaws. (iv) appointment and removal of directors as set forth herein. (v) appointment and removal of certain officers as set forth herein. (vi) those issues or matters upon which the member is granted voting rights as set forth in the baf's articles of incorporation, these bylaws, or the arizona nonprofit corporation act. B. Either the member of the board of directors of the baf may propose any plans, activities, amendments or revisions designed to facilitate or carry out any of the foregoing acts or activities. When it is the member proposing any such acts or activities, notice of any such plans, activities, amendments or revisions shall be given to the board of directors by the member not less than 14 days prior to the act or activity being approved by the member. C. The foregoing rights of approval of the member of the baf shall be in addition to, not in limitation of, any rights granted by the laws of the state of arizona to members entitled to vote upon the matter of disposition of corporate assets, plans of merger or dissolution, or other such acts. Powers of the member - the voting member shall: a. Appoint or remove the president and evaluate the performance of the president. B. Appoint all members of the board of directors of the baf, giving due consideration to persons nominated by the baf. C. Appoint the initial members of the arizona development committee and the gift committee. D. Review and approve mission statements and strategic plans. E. Approve the establishment of all new corporate or partnership entities created or joined by the baf. F. Review and approve operating and capital budgets of the baf. G. Approve all unbudgeted expenditures over thresholds and signature authority as established by policy of the member. H. Approve the sale of any asset over thresholds and signature authority as established by policy of the voting member. I. Approve major contracts of a nature and size as determined by policy and signature authority of the voting member. J. Approve all debt of the baf of types and limits over thresholds and signature authority as established by the policy of the voting member.”

“A. Affirmative consent and approval of the member shall be required for any of the following actions: (i) adoption of a plan of liquidation or dissolution of the baf. (ii) merger, consolidation, sale, lease, mortgage, pledge, transfer or disposal of all or substantially all of the assets of the baf. (iii) repeal, modification, alteration, amendment, in whole or in part, or addition to the articles of incorporation or bylaws of the baf or adoption of new articles of incorporation or new bylaws. (iv) appointment and removal of directors as set forth herein. (v) appointment and removal of certain officers as set forth herein. (vi) those issues or matters upon which the member is granted voting rights as set forth in the baf's articles of incorporation, these bylaws, or the arizona nonprofit corporation act. B. Either the member of the board of directors of the baf may propose any plans, activities, amendments or revisions designed to facilitate or carry out any of the foregoing acts or activities. When it is the member proposing any such acts or activities, notice of any such plans, activities, amendments or revisions shall be given to the board of directors by the member not less than 14 days prior to the act or activity being approved by the member. C. The foregoing rights of approval of the member of the baf shall be in addition to, not in limitation of, any rights granted by the laws of the state of arizona to members entitled to vote upon the matter of disposition of corporate assets, plans of merger or dissolution, or other such acts. Powers of the member - the voting member shall: a. Appoint or remove the president and evaluate the performance of the president. B. Appoint all members of the board of directors of the baf, giving due consideration to persons nominated by the baf. C. Appoint the initial members of the arizona development committee and the gift committee. D. Review and approve mission statements and strategic plans. E. Approve the establishment of all new corporate or partnership entities created or joined by the baf. F. Review and approve operating and capital budgets of the baf. G. Approve all unbudgeted expenditures over thresholds and signature authority as established by policy of the member. H. Approve the sale of any asset over thresholds and signature authority as established by policy of the voting member. I. Approve major contracts of a nature and size as determined by policy and signature authority of the voting member. J. Approve all debt of the baf of types and limits over thresholds and signature authority as established by the policy of the voting member.”

“Banner Health's Tax Department (BH Tax) is RESPONSIBLE FOR OVERSEEING THE PROCESSES FOR PREPARING THE FORM 990. BH Tax TAKES THE LEAD ROLE IN THE PROCESS AND IS CHARGED WITH THE DUTY TO COLLECT THE FINANCIAL AND OTHER INFORMATION NEEDED TO COMPLETE THE FORM 990. THIS INCLUDES COORDINATING WITH OTHER BH DEPARTMENTS, SUCH AS THE LEGAL, PAYROLL, GOVERNMENT RELATIONS, LICENSING, COMMUNITY BENEFIT, COMPENSATION AND BENEFITS, ACCOUNTS PAYABLE, RISK MANAGEMENT, CERTIFICATION, CREDENTIALING, FINANCIAL SERVICES, AND TREASURY DEPARTMENTS IN ORDER TO ENSURE THAT THE EXPERTISE OF EACH DEPARTMENT IS UTILIZED IN THE INFORMATION-GATHERING PROCESS. ONCE THE INFORMATION IS GATHERED, IT IS ORGANIZED AND ASSEMBLED INTO AN ORGANIZER THAT WILL BE USED BY AN OUTSIDE ACCOUNTING FIRM TO PREPARE THE FORM 990. BH HAS AUDITED FINANCIAL STATEMENTS PREPARED ANNUALLY BY AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM AND USES THIS SAME FIRM TO PREPARE ITS FORM 990 BECAUSE OF ITS EXPERTISE IN NON-PROFIT HOSPITAL SYSTEMS AND ITS SPECIFIC KNOWLEDGE OF Banner Health's OPERATIONS AND RETURN COMPLEXITY. ONCE THE INFORMATION GATHERING PROCESS IS COMPLETE, A FIRST DRAFT OF THE FORM 990 IS PREPARED by the outside accounting firm AND READIED FOR REVIEW. THE REVIEW PROCESS BEGINS WITH AN INITIAL REVIEW DONE BY BH Tax. DURING THIS REVIEW, A LIST OF QUESTIONS, ISSUES AND ADDITIONAL TASKS IS COMPILED. THIS LIST IS THEN DISSEMINATED TO THE APPROPRIATE Banner Health DEPARTMENTS FOR FURTHER ACTION. ONCE ALL QUESTIONS, ISSUES AND TASKS HAVE BEEN COMPLETED, A SECOND REVIEW BY BH Tax is and the accounting firm is DONE. AGAIN, IF APPLICABLE, A LIST OF QUESTIONS, ISSUES AND ADDITIONAL TASKS IS COMPILED. THIS LIST IS THEN DISSEMINATED TO THE APPROPRIATE Banner Health DEPARTMENTS FOR FURTHER ACTION. ONCE THIS SECOND REVIEW PROCESS IS COMPLETED, A FINAL DRAFT OF THE FORM 990 IS PRESENTED TO certain BAF officers. CHANGES TO THE FORM 990 ARE MADE IF NECESSARY. THE FINAL VERSION OF THE FORM 990 IS SIGNED BY a BAF OFFICER and the return is made available to the governing body.”

“THE BAF HAS ADOPTED THE BANNER HEALTH CONFLICT OF INTEREST POLICY. THIS POLICY REQUIRES THE INTERNAL ASSURANCE DEPARTMENT OF BANNER HEALTH TO PROVIDE EACH PARTY WITH A DISCLOSURE QUESTIONNAIRE. THE INTERNAL ASSURANCE DEPARTMENT PREPARES A SUMMARY FOR THE TAX DEPARTMENT. THIS SUMMARY IS ALSO PRESENTED TO THE AUDIT COMMITTEE. THE TAX DEPARTMENT PREPARES ANY REQUIRED FORM 990 DISCLOSURES. PURSUANT TO Banner Health's CONFLICT OF INTEREST POLICY, ALL BOARD MEMBERS, OFFICERS, AND THE DIRECTOR OF INTERNAL ASSURANCE MUST DISCLOSE THE EXISTENCE OF ANY FINANCIAL INTEREST THAT MAY GIVE RISE TO A CONFLICT OF INTEREST.”

“The organization's audited financial statements and tax returns are available upon request. Copies are maintained at each administrative office and in the legal and tax departments of bh. The organization's governing documents are not required to be made available to the public, and, therefore, they are not made public.”