Clayton Foundation for Research

“Form 990 is prepared by the Foundations accounting staff and sent to the Brorby, Crozier & Dobie law firm for review by a tax partner, after which each trustee was given a copy of the return for review, along with a memorandum from the Treasurer pointing out some of the key information and disclosures. After such review and approval of the Form 990 by the trustees, the return is signed and dated by the appropriate officer of the Foundation and filed with the Internal Revenue Service.”

“Annually, the trustees and officers review the Conflicts of Interest Policy adopted by the Foundation. At a meeting of the Board each year, both the trustees and the officers sign and date a statement which affirms that such person has received a copy of the conflict of interest policy, has read and understands the policy, has agreed to comply with the policy, and understands that the Foundation is a charitable organization and that in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one of more of its tax-exempt purposes. It is the policy of the Foundation to assure that any conflicts of interest or potential conflicts of interest are fully disclosed to the Board before a decision is made or before the Foundation enters into a proposed transaction. Where necessary to determine whether a conflict of interest exists, after disclosure of the financial interest and all material facts, and after any discussion with the interested person, he or she leaves the Board meeting while the determination of whether a conflict of interest exists is discussed. If the Board determines that a conflict exists, the Board then determines whether the transaction or arrangement is fair and reasonable and should be permitted despite the conflict (or not) as being in the best interests of the Foundation. In instances where the Board has determined that a member has failed to disclose an actual or possible conflict of interest, it will take appropriate disciplinary and/or corrective action.”

“Several written opinions have been obtained from well recognized independent accounting and consulting firms as to the reasonableness of the compensation being paid to the officers and trustees of the Foundation (including amounts paid by related organizations). In addition, all steps listed in the regulations under IRC Section 4958 (including approval by a compensation committee composed of disinterested persons) have been taken to obtain the rebuttable presumption that compensation paid to the trustees and officers is reasonable. More specifically, the Foundation has periodically engaged an independent consulting firm to review the compensation of the officers and trustees of the Foundation and the group of related and supporting entities. Such consulting firm examines the relevant facts and collects information and data from the Foundation. It also collects and analyzes compensation data from a peer group of unrelated non-profit and for-profit organizations that it selects for comparability purposes. Such firm then renders a written report and opinion containing its conclusions and recommendations. Such report (including a thorough description of the facts and the comparability analysis and data) is provided to the Foundations Compensation Committee. Such committee, which has the sole authority to approve officer and trustee compensation, constitutes an authorized body composed of persons that do not have a conflict of interest with respect to such compensation arrangements under the rules and requirements set forth in Reg. 53.4958-6(c)(1). The committee meets and reviews the consulting firms report and the comparability analysis and data. At the meeting, the committee has the opportunity to ask questions and request additional information from a Foundation representative on the committee (who recuses himself from the meeting before any action is taken). After review of the relevant documents and data and after deliberations, the independent committee members make the determination with respect to the amount and reasonableness of the officer and trustee compensation arrangements. Such determination is binding on the trustees and officers of the Foundation. Detailed minutes of each Compensation Committee meeting are contemporaneously prepared and maintained in the Foundations files.”

“See Line 15 a for the description of the compensation review and approval of other officers or key employees.”

“No documents available to the public.”

“The recommendation regarding independent members of the governing board of a charity is described and discussed in detail in the report entitled Principles for Good Governance and Ethical Practice, A Guide for Charities and Foundations, Reference Edition, that was published in October 2007 by the Panel on the Nonprofit Sector. This panel was convened by Independent Sector and its recommendations have been cited with approval by the Internal Revenue Service. Such report concludes that the principle with respect to independent directors does not apply to various types of organizations, including supporting organizations such as the Foundation, as to which the requirements of IRC Section 509(a)(3) require common Board members. In this regard, Footnote 27 on page 23 expressly states as follows: This principle [a substantial majority of the Board should be independent] does not apply to private foundations; medical research institutions; supporting organizations or subsidiaries that are required by lawto include representatives of the supported organizations or sponsoring charities on their board [footnote listing continues with several other specific types of Section 501(c)(3) organizations].”

“Mr. Thomas J. Brorby, who became a trustee of the Foundation on July 1, 1998 (and was elected Chairman of the Board effective May 1, 2008), has provided legal services to the Foundation since 1965. Mr. Brian W. Crozier, who became a trustee of the Foundation on January 1, 2019, has provided legal services to the Foundation since 1985. Mr. Brorby and Mr. Crozier are members of the law firm of Brorby, Crozier & Dobie, P.C. (B,C&D) and together own more than 35% of B,C&D. Such firm is engaged to furnish legal services to the Foundation on an hourly basis in connection with various matters upon the request of Foundation trustees and officers other than Mr. Brorby and Mr. Crozier. The Foundations relationship with B,C&D pre-dates the naming of either Mr. Brorby or Mr. Crozier as trustees. In their capacity as members of the Board of the Foundation, Mr. Brorby and Mr. Crozier do not participate in any decisions involving assignment of work to B,C&D and are not involved in the review and approval of the detailed monthly invoices sent by B,C&D to the Foundation. In their capacity with B,C&D, Mr. Brorby and Mr. Crozier do not participate in the preparation of the monthly statements of amounts billed to the Foundation. The other trustees (with Mr. Brorby and Mr. Crozier abstaining) have approved this arrangement with full knowledge of Mr. Brorbys and Mr. Croziers position as a member of and a holder of a financial interest in B,C&D. Several written opinions have been obtained from well recognized independent accounting and consulting firms as to the reasonableness of the legal fees being paid to B,C&D by the Foundation. In addition, all steps listed in the regulations under IRC Section 4958 (including approval by a compensation committee composed of disinterested persons) have been taken to obtain the rebuttable presumption that compensation paid to B,C&D is reasonable. More specifically, the Foundation has periodically engaged an independent consulting firm to review the legal fees paid to B,C&D. Such consulting firm examines the relevant facts and collects information and data from the Foundation and B,C&D. It also collects and analyzes compensation data from a peer group of comparable unrelated attorneys and law firms that it selects for comparability purposes. Such consulting firm then renders a written report and opinion containing its conclusions and recommendations. Such report (including a thorough description of the facts and the comparability analysis and data) is provided to the Foundations Compensation Committee. Such committee, which has the sole authority to approve the compensation arrangement with B,C&D (including hourly rates), constitutes an authorized body composed of persons that do not have a conflict of interest with respect to such compensation arrangements under the rules and requirements set forth in Reg. 53.4958-6(c)(1). The committee meets and reviews the consulting firms report and the comparability analysis and data. At the meeting, the committee has the opportunity to ask questions and request additional information from a Foundation representative on the committee (who recuses himself from the meeting before any action is taken). After review of the relevant documents and data and after deliberations, the independent committee members make the determination with respect to the amount and reasonableness of the compensation arrangement. Such determination is binding on B,C&D. Detailed minutes of each Compensation Committee meeting are contemporaneously prepared and maintained in the Foundations files.”

“OTHER PROGRAM SERVICES 4: Engineered Proteases as the Next Generation of Protein Therapeutics OTHER PROGRAM SERVICES 5: Antibody Discovery and Optimization Using the Eclonal Technology OTHER PROGRAM SERVICES 6: Electroceutical Sciences and Medicine OTHER PROGRAM SERVICES 7: Discovering New Mechanisms and Therapeutics for Brain Injury OTHER PROGRAM SERVICES 8: Identification of Host-based Antiviral Targets OTHER PROGRAM SERVICES 9: Targeting Novel Tumor-intrinsic PD Pathways to Optimize Cancer lmmunotherapy OTHER PROGRAM SERVICES 10: Monoclonal Antibody Delivery Systems OTHER PROGRAM SERVICES 11: Early Detection and Treatment of Glaucoma OTHER PROGRAM SERVICES 12: Gene and Protein-based Therapy OTHER PROGRAM SERVICES 13: Grants”

“Postretirement health benefit charge = -$285472”