Friendship Foundation

“Lucian Grove, Jr., member of the board, is the brother-in-law of Richard Sayers, the corporate secretary.John Williamson, III and Edgar Baker, members of the board, are both on the board of directors of the Bank of Botetourt. Suzanne Ranson, member of the board, is the Executive Director of Good Samaritan Hospice. Friendship Health and Rehab Center, a related organization, received $164,722 from Good Samaritan Hospice for patient care during the year ending June 30,2014.”

“The business office prepares the Form 990 and forwards it to the CFO and CEO for review. The CFO and CEO return the Form 990 to the business office to resolve questions and make changes. The Form 990 goes back to the CFO and CEO to ensure questions and changes have been made. A copy of the Form 990 is then provided to each board member by the CFO approximately 2 weeks prior to the due date. They are given 1 week to review and forward questions to the CFO. Review questions are resolved and the Form 990 is filed.”

“The policy is included in both the Employee Handbook and the Code of Conduct, which is issued to and discussed with each employee and board member. An annual letter affirming the policy and asking for written declarations of any potential conflicts is sent to all board members and approximately 20% of employees (all managers, business office staff, purchasing department staff, human resources staff, etc.). Responses are reviewed by the Corporate Compliance Officer, reported to the board, and acted upon as needed. Also, the corporation is aware of the business affiliations of officers and directors and ensures that each is aware of the affiliations. Whenever discussions occur in which a conflict exists, the individual recuses him/herself from the proceedings so the other members can discuss the matter freely. Each year at its Corporate Governance Committee meeting and Annual Board meeting a report is made to the board of directors describing the business affiliations and any business transactions that occurred during the year between the corporation and the external businesses in which the directors or officers are involved.”

“The Compensation Committee of the Board routinely engages an external consultant to review benchmark compensation data for the CEO and other key management positions. A number of nationally recognized salary surveys are utilized as part of this process and the consultant's written report is received by the Compensation Committee and the full board. Annually, the Compensation Committee reviews the compensation for each member of this group utilizing the benchmark data and any adjustments in compensation are recommended from the Compensation Committee to the full board for consideration and approval.”

“Upon request, the company will provide copies of governing documents, policies, financial statements, and form 990's to persons asking for the documents.”

“The organization shares board members and officers with related organizations. The average hours a week that each individual spends with each organization is as follows:Friendship Health and Rehab Center, Inc.: Calvin Lilly 1.27 Monty Plymale 1.73 Edwin R. Feinour 10.40 Edgar K. Baker 1.56 Glen Combs 1.16 John B. Williamson, III 2.89 Lucian Grove, Jr. 1.73 Suzanne Ranson .58 Joe Vipperman 2.31 Robert Lawson 1.73 Robert Sandel 2.02 Garnett Smith 1.73 Richard Sayers 4.62 Cynda Johnson .58 Kathryn Oelschlager 2.31 Friendship Apartment Village Corp.: Calvin Lilly .10 Monty Plymale .13 Edwin R. Feinour .80 Edgar K. Baker .12 Glen Combs .09 John B. Williamson, III .22 Lucian Grove, Jr. .13 Suzanne Ranson .04 Joe Vipperman .18 Robert Lawson .13 Robert Sandel .16 Garnett Smith .13 Richard Sayers .36 Cynda Johnson .04 Kathryn Oelschlager .18Eastwood Assisted Living, Inc.: Calvin Lilly .14 Monty Plymale .19 Edwin R. Feinour 1.12 Edgar K. Baker .17 Glen Combs .12 John B. Williamson, III .31 Lucian Grove, Jr. .19 Suzanne Ranson .06 Joe Vipperman .25 Robert Lawson .19 Robert Sandel .22 Garnett Smith .19 Richard Sayers .50 Cynda Johnson .06 Kathryn Oelschlager .25 Valley Management Co., Inc.: Calvin Lilly .62 Monty Plymale .85 Edwin R. Feinour 5.09 Edgar K. Baker .76 Glen Combs .57 John B. Williamson, III 1.41 Lucian Grove, Jr. .85 Suzanne Ranson .28 Joe Vipperman 1.13 Robert Lawson .85 Robert Sandel .99 Garnett Smith .85 Richard Sayers 2.26 Cynda Johnson .28 Kathryn Oelschlager 1.13 Barbara Johnson 40.00 Friendship Outpatient & Wellness, Inc.: Calvin Lilly .04 Monty Plymale .05 Edwin R. Feinour .32 Edgar K. Baker .05 Glen Combs .04 John B. Williamson, III .09 Lucian Grove, Jr. .05 Suzanne Ranson .02 Joe Vipperman .07 Robert Lawson .05 Robert Sandel .06 Garnett Smith .05 Richard Sayers .14 Cynda Johnson .02 Kathryn Oelschlager .07”

“Friendship Health and Rehab Ctr., Inc., ein 23-7126857, is the paymaster for nine related corporations which have employees. This corporation pays all employees and prepares and files all required federal payroll returns. Friendship Foundation is one of them and had 2 employees during the year. Each corporation and its employees are as follows:Friendship Health and Rehab Center, Inc. 657 employeesFriendship Apartment Village Corp. 25Eastwood Assisted Living, Inc. 65Professional Health Care Services, Inc. 45Friendship Pharmacy, Inc. 32Valley Management Co., Inc. 50LTC Services, Inc. 18Friendship Outpatient & Wellness Services, Inc. 11Friendship Foundation 2Total 905”

“The corporation participates in a consolidated audit with affiliated companies reported on Schedule R. When finished, the audited statements are presented to the Finance Committee and the board of directors by the external auditors.”