Banner Health Foundation

“The bhf board of directors is primarily a fundraising board without fiscal oversight. The banner health board of directors has the broader authority over bhf as described in the narrative for part vi, lines 7a/b. In many, if not all, situations, the bhf board delegates authority directly to the banner health ceo.”

“Bhf 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 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 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 the 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 banner health conducted by such consultant during the preceding year was conducted with the knowledge and consent of the chair of the committee - details the amounts paid by banner health to the consultant in its capacity as an external compensation consultant to the committee, and the amounts paid by banner health, if any, to the consultant and its affiliates for any other engagements. - with the assistance of the independent compensation consultant, the compensation committee annually reviews the performance of the ce”

“JOHN STRITTMATTER AND JOHN GRAHAM - Business relationship”

“The sole voting member of banner health foundation is banner health, an arizona nonprofit corporation exempt from tax as an entity described under section 501(c)(3) of the internal revenue code. The member's vote shall be required on: (a) election and removal of directors as set forth in the organization's bylaws; (b) election and removal of certain officers as set forth in the organization's bylaws; (c) the adoption of any plan of merger or consolidation; (d) the adoption of any plan of dissolution; (e) the sale or encumbrance of any asset as set forth in the organization's bylaws; (f) amendment of the articles of incorporation or bylaws of the corporation; and (g) those issues or matters upon which the member is granted voting rights as set forth in the articles of incorporation, the bylaws, or the arizona nonprofit corporation act. The corporation may have such nonvoting members as the member shall create and authorize. At such time as the member creates a class or classes of nonvoting membership for the corporation, it shall amend the bylaws accordingly. Creation of any class of nonvoting member shall be effective only upon amendment of the bylaws. Powers of the voting member - the voting member shall have and exercise those powers hereafter described as well as those specific powers set forth in other sections of the bylaws. 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 corporation following nomination by the board of directors of the corporation; (c) review and approve mission statements and strategic plans; (d) approve the establishment of all new corporate or partnership entities created or joined by the corporation; (e) review and approve operating and capital budgets of the corporation; (f) approve all unbudgeted expenditures over thresholds and signature authority as established by policy of the voting member; (g) approve the sale of any asset over thresholds and signature authority as established by policy of the voting member; (h) approve major contracts of a nature and size as determined by policy and signature authority of the voting member; and (i) approve all debt of the corporation of types and limits over thresholds and signature authority as established by policy of the voting member.”

“Banner Health, as the controlling tax-exempt organization, has the power to elect the board of directors.”

“Banner Health, as the controlling tax-exempt organization, has certain reserved powers.”

“BH'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. BANNER HEALTH 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 BH 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 BHF officers. CHANGES TO THE FORM 990 ARE MADE IF NECESSARY. THE FINAL VERSION OF THE FORM 990 IS SIGNED BY a BHF OFFICER and the return is made available to the governing body.”

“The organization's governing documents, audited financial statements, conflict of interest policy, and tax returns are available upon request. Copies are maintained at each administrative office and in the legal and tax departments. 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 governing documents, audited financial statements, conflict of interest policy, and tax returns are available upon request. Copies are maintained at each administrative office and in the legal and tax departments.”

“Approximately 139 dedicated volunteers help advance the work of banner health foundation each year. These individuals embody our belief that the health and well-being of our community is a shared responsibility. Banner health foundation volunteers include people of all ages, backgrounds and skill sets, which truly represent the diversity of the community we serve. Whether working behind the scenes or front and center, banner health foundation volunteers are committed to helping others. Individuals donate their time and talents to make a difference by serving as members of the board of directors, members of various other boards, campaign cabinets, advisory councils, event planning committees and more. Responsibilities include, but are not limited to, operational oversight, donor cultivation, relationship building, event planning, and public speaking. Banner health foundation volunteers assist in a variety of capacities and are critical to our success.”

“INTERCOMPANY TRANSFERS - 7470908; RESTRICTED CONTRIBUTIONS - 29586254; FUNDS RELEASED FROM RESTRICTION - -25392459; Total - 11664703;”