Bay Life Services Corporation

“Part vi, line 6 the organization is an affiliate and subsidiary of medstar health, inc., a tax-exempt maryland non-stock corporation. Medstar health, inc., or one of its affiliates and subsidiaries, is the sole member of the organization.”

“Part vi, line 7a as an affiliate and subsidiary of medstar health, inc., a tax-exempt maryland non-stock corporation, the organization may recommend person(s) for membership on the organization's governing body. Any such recommendation by the organization is subject to approval by the governance committee of the board of directors of medstar health, inc. The board of medstar health, inc. Has delegated certain approval authority to the governance committee and the president & ceo of medstar health,inc. Decisions of governing body part vi, line 7b as an affiliate and subsidiary of medstar health, inc., a tax-exempt maryland non-stock corporation, the bylaws of the organization are subject to certain reserved powers, which provide that the sole member of the organization must approve certain decisions, including but not limited to matters concerning the sale or purchase of real or personal property, capital budgets, strategic planning, investments, and corporate governance.”

“Part vi, line 11b the process for reviewing the form 990 included education and transparency. Senior financial executives, working with independent outside experts, thoroughly reviewed form 990 and accompanying instructions. In addition, senior executives reviewed the relevant sections of the form 990 with the following committees of the organization's governing body: finance, audit, governance, strategic planning, and executive compensation. Following these meetings, the governing body was provided a copy of the form 990 in its final form and given an opportunity to provide any input or comments relating to the form 990 prior to its filing.”

“Part vi, line 12c appointment of boards of directors medstar health (and its subsidiaries) require all nominated directors, prior to their appointment or election, to disclose the existence of (or potential existence of) any transaction with medstar that would result in a conflict of interest. Such disclosures (if any) are reviewed by the governance committee of the medstar health board of directors which determines how the matter should be resolved. Annual disclosures - all officers, directors, and senior managers all officers, directors and senior managers are required, not less than annually, to complete a survey of questions concerning any transactions or relationships which would or could represent a conflict of interest. Such disclosures (if any) are reviewed by the governance committee of the medstar health board of directors which determines how the matter should be resolved. In addition, officers and directors of maryland hospitals and nursing centers are required to annually disclose additional information relating to potential conflicts of interest and such disclosures are reported to the maryland health services cost review commission (hscrc).”

“Part vi, line 15 the executive compensation committee of the board of directors of medstar health, inc. (the "committee") has oversight over the executive compensation program (the "program") of medstar health, inc. And its affiliates. Total compensation for the top management officials, officers and key employees of medstar health, inc. And its affiliates are reviewed and approved by the committee with assistance and guidance from an independent third party advisor. The members of the committee are independent from all of the participants in the program. The main objective of the program is to provide market competitive total compensation that is internally equitable and has a strong pay-for-performance linkage. Performance is evaluated at the system, operating unit, and individual levels. The overall total compensation philosophy is managed at the 75th percentile of the competitive market for comparable size (net revenue) and type (tax-exempt healthcare organizations). Where appropriate, additional industry data is considered (general business and/or taxable healthcare) for selected positions that can be recruited from or potentially lost to these industries (e.g., information technology, finance, etc.). The committee has engaged ernst & young llp ("e&y") to serve as an advisor on the reasonableness and competitiveness of the program. In determining reasonableness and competitiveness, e&y reviews market practices and trends, and makes recommendations related to the program. E&y utilizes information from custom surveys, national compensation surveys, proprietary databases, and client experiences to determine its final recommendations. E&y presents their findings and recommendations to the committee. The committee makes the final decisions on all of the compensation determinations of the program. All decisions made by the committee are contemporaneously documented.”

“Part vi, line 19 medstar health posts its annual financial audit and quarterly financial reports to the electronic municipal market access (emma) system. The organization also e-mails its annual and quarterly disclosures to holders of the company's publicly traded debt. The company's governance documents and conflicts of interest policies are available upon request through its corporate (or as applicable entity) public information offices.”

“Part xi, line 9 equity transfer................................... $ -3,140,217 dist-gen ptr / maj interest....................... $ 1,981,200 ---------- $ -1,159,017”