Tsbs Inc.

“Tsbs, inc. Is comprised of the participating state banker associations that participate in the foundation.”

“The board of trustees elect the officers for the upcoming year at the annual fall meeting. The nominating committee places individuals in nomination for approval by the entire board of trustees. The board of trustees consists of representatives from the participating bankers associations. The board of trustees also elect those individuals who will serve on the executive committee.”

“A certified public accounting firm is retained to prepare the annual irs form 990. The cpa firm provides a copy of the completed form to the executive committee of the board of directors for their review and approval. A copy of the irs 990 tax return was provided to the executive director for his review, approval and signature.”

“Board of directors meet bi-annually to address policy issues, cricullum changes, teacher evaluations and new hires, investment policy review and policy decisions, advertising efforts, etc. During these meetings any issues impacting conflict of interest, prohibitive transactions will be addressed by the full board of directors and acted upon.”

“The Executive Committee performs the following actions; 1. Board members, not having a conflict of interest, approve the Executive Directors, annual salary, 2. The Board conducts an internal survey of the compensation paid to other Executive Directors, more than 3, of similiar Banking Training Organizations around the United States, 3. The Executive Committee adequately and concurrently documents that the Executive Director compensation package is within the range of such comparable data. 4. The Compensation package is approved in advance of the compensation earned. 5. The Executive Committee has adopted the provisions of Treasury Regulation Section 53.4958-6(c)(1)(iii). The conflict of interest policy precludes any Executive Committee members who have a financial interest in the compensation transaction, whether directly or indirectly through a family or business relation with a party to the transaction, from voting on the approval of the transaction. 6. The Executive committee members not having a conflict of interest will review the salaries of at least 3 different persons with positions similar to the Exec. Directors, at comparable schools to ensure that the Executive Directors aggregate compensation package is not more than the Executive Directors Peers. 7. The documentation includes the following; a. The terms of the compensation package and the date it was approved, b. The members of the Executive Committee who were present during the debate on the compensation package and those who voted on its approval, c. The comparable data relied upon by the Executive Committee and the means by which the Executive Committee obtained the data and the recusal of any members of the Executive Committee who may have had a conflict of interest. d. The Exec. Committee must prepare this documentation before the later of 60 days after the vote or the next meeting of the Executive Committee.”

“As clearly indicated in the executive board and full board meeting minutes, all financial reporting is provided to all parties. The irs form 990 will also be made available upon request to the executive director. Any public request to view these documents along with the irs form 1023 and the tax exempt determination letter from the irs will also be made available upon request.”

“OUT OF AN ABUNDANCE OF CAUTION, NO AUDIT WAS PERFORMED FOR THE FISCAL YEAR ENDING JUNE 30, 2017. HOWEVER, THE BOARD STILL BELIEVES THAT NO UNCERTAIN TAX POSITION EXISTS AS OF JUNE 30, 2017; SO ACCORDINGLY THE FOLLOWING NOTE DISCLOSURE STILL APPLIES; "Accounting for the uncertainty of tax positions can impact the financial statements. Even though the School is exempt from income taxes, The School must still consider whether its exempt income and other activities of the School might be determined to be unrelated business income, and whether the School has properly maintained its tax exempt status. FASB ASC 740 (previously FIN # 48 ), published by the Financial Accounting Standards Board, addresses the issue of accounting for the uncertainty of material tax positions impacting the financial statements. The Officers have adopted the provisions of FASB ASC 740 effective June 30, 2009. The accounting for all material positions taken, or expected to be taken, on any income tax return is governed by FASB ASC 740. Income tax returns include those positions that were filed or that should have been filed with Federal taxing authorities. It is the Officers' policy to assess all material postions taken on any federal income tax return. The Officers will require its legal and tax counsel to communicate to them all such uncertain tax positions in order to evaluate the impact of the tax position and the reporting and disclosure required. The requirement will apply to not only the current reporting year but also to all prior open reporting years that could still be subject to examination by a taxing authority. The Officers have determined that any material uncertain tax positions that are presented to the Officers will be recognized and measured using a " more-likely-than-not ", (MLTN) threshold. The MLTN threshold means that; 1. A benefit related to an uncertain tax position may not be recognized in the financial statements unless it is MLTN that the position will be sustained based on its technical merits, and 2. There must be more than a 50 % likelihood that the position would be sustained if challenged and considered by the highest court in the relevant jurisdiction. Measurement of any uncertain tax position will require calculating the cumulative probability of an outcome either for or against the tax position. The tax benefit of a qualifying position is the largest amount of tax benefit that is more than 50 % likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Initial recognition of an uncertain tax position will require continued reassessment of the tax position on an annual basis. As of each year end any unresolved uncertain tax postions must be reassessed, and the Officers must determine whether; 1. the factors underlying the sustainability assertions have changed and, 2. the amount of the recognized tax benefit is still appropriate. Developments such as case law, changes in tax law, new rulings or regulations issued by taxing authorities, could affect whether a tax position should be recognized or the amount that should be reported. The School will be required to accrue interest and penalties that, under present tax law, the School would incur if the uncertain tax position ultimately were not sustained. For the year ending June 30, 2017, no uncertain tax positions were determined to exist.”

“Tsbs, inc has a rabbi trust that is owned 100 % by tsbs, inc. All assets have been reported on part x, balance sheet, line 11, and all investment earnings have been reported on part viii, statement of income, line 3 and part xi, reconcilation of net assets, line 5. The entity, graduate school of banking rabbi trust, fid # 20-6882906, is a grantor trust, for which irs form 1041 returns have been filed. All transaction activity of the grantor trust has been and will continue to be reported on the irs form 990, as if it is a disregarded entity.”