2017-11-15T13:11:57-06:00 2016-12-31 990 2016-01-01 530116145 NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION NATI 7039075960 4301 WILSON BLVD FIN8-110 ARLINGTON VA 22203 VENEICIA LOCKHART VP,FINANCE 7039075960 2017-11-15 74.127.88.11 2017-11-15 13:11:30 ES P BE98FAB6046199880AF196D74BFA181CF7AFBF90 BE98FAB6046199880AF196D74BFA181CF7AFBF90 2016 2017-02-10 21:41:12Z JIM MATHESON 4301 WILSON BLVD FIN8-110 ARLINGTON VA 22203 186129629 0 X NRECA.COOP X 1942 DC MEMBERSHIP ASSOCIATION DEDICATED TO REPRESENTING THE NATIONAL INTEREST OF COOPERATIVE ELECTRIC UTILITIES AND THE CONSUMERS THEY SERVE. NRECA HAS MORE THAN 900 VOTING MEMBERS, A MAJORITY OF WHICH ARE ELECTRIC COOPERATIVES THAT SERVE 42 MILLION CONSUMERS IN 47 STATES. 47 47 856 0 7062145 1191637 1812109 2222312 155657230 160322292 133742 178981 15423156 16070592 173026237 178794177 0 0 0 0 116968738 113950529 0 0 0 59379252 66981440 176347990 180931969 -3321753 -2137792 179704649 187608149 92446227 98478236 87258422 89129913 X NRECA'S PURPOSE IS TO ENGAGE IN THE COMPILATION AND DISSEMINATION OF INFORMATION WITH RESPECT TO RURAL ELECTRIFICATION AND THE FURNISHING OF OTHER SERVICES TO RURAL ELECTRIC COOPERATIVES AND OTHERS IN CONNECTION WITH THE COORDINATION, ADVANCEMENT, AND DEVELOPMENT OF RURAL ELECTRIFICATION IN THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, FOR THE PRIMARY AND MUTUAL BENEFIT OF THE MEMBERS OF THE ASSOCIATION AND THEIR CONSUMER MEMBERS. NRECA'S MISSION IS TO PROMOTE, SUPPORT AND PROTECT THE COMMUNITY AND BUSINESS INTERESTS OF ELECTRIC COOPERATIVES. 0 0 REGULATORY, LEGAL, AND LEGISLATIVE: NRECA PROVIDES SUPPORT SERVICES TO MEMBERS RELATED TO COMPLIANCE, LEGAL, AND REGULATORY ISSUES. IN ADDITION, NRECA EDUCATES AND ADVOCATES TO MEMBERS OF CONGRESS AND THEIR STAFFS, FEDERAL AGENCIES, AND THE ADMINISTRATION ON POLICY ISSUES IMPACTING NRECA VOTING MEMBERS AND THE 42 MILLION CONSUMERS-MEMBERS SERVED BY NRECA VOTING MEMBERS, AND KEEPS OUR MEMBERSHIP INVOLVED WITH THE LEGISLATIVE PROCESS. CONSULTING, TRAINING, AND CONFERENCES: NRECA PROVIDES MEMBERS WITH ESSENTIAL INDUSTRY SPECIFIC TRAINING AS WELL AS DIRECTOR, MANAGER, AND EMPLOYEE TRAINING; CONSULTING RELATED TO THE ORGANIZATION AND PROCESS IMPROVEMENTS, AND INDUSTRY AND TECHNOLOGICAL CHANGES; AND CONFERENCES AND MEMBERSHIP MEETINGS, PROMOTING COLLABORATION AND NETWORKING. MULTIPLE EMPLOYER BENEFIT PLAN ADMINISTRATION: NRECA PROVIDES PLAN ADMINISTRATION SERVICES ON A COST REIMBURSABLE BASIS TO THREE MULTIPLE EMPLOYER BENEFIT PROGRAMS IN WHICH MOST NRECA MEMBERS CAN PARTICIPATE. THEY CONSIST OF TWO RETIREMENT PROGRAMS, THE NRECA RETIREMENT SECURITY PLAN, WHICH IS DEFINED BENEFIT PENSION PLAN AND IS EXEMPT FROM INCOME TAX UNDER IRS SECTION 401(A), AND THE NRECA 401(K) PENSION PLAN, WHICH IS A DEFINED CONTRIBUTION PENSION PLAN AND IS EXEMPT FROM INCOME TAX UNDER IRS SECTION 501. THESE TWO PLANS SERVE MORE THAN 60,000 ACTIVE AND RETIRED EMPLOYEES OF MOST NRECA MEMBERS. THE THIRD PLAN IS THE NRECA GROUP BENEFIT PROGRAM, WHICH PROVIDES MEDICAL, DENTAL, VISION, DISABILITY, LIFE, TRAVEL, AND ACCIDENT INSURANCE TO MOST NRECA MEMBERS. THIS PLAN IS EXEMPT FROM INCOME TAX UNDER IRS SECTION 501(C)(9). 0 0 1 1 0 0 0 1 0 1 1 0 1 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 1 0 0 0 0 0 1 1 1 0 1 447 0 856 1 1 1 0 0 0 0 0 X 47 47 1 0 0 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 VA X X VENEICIA LOCKHART 7039075960 4301 WILSON BLVD FIN8-110 ARLINGTON VA 222031860 MEL COLEMAN PRESIDENT 24.00 X X 95600 0 0 PHIL CARSON VICE PRESIDENT 17.00 X X 89500 0 0 CURTIS WYNN SECRETARY-TREASURER 17.00 X X 80550 0 0 ANTHONY ANDERSON DIRECTOR 4.00 X 29950 0 0 LAWRENCE BECKER DIRECTOR 10.60 0.40 X 25000 0 0 MARK BROWN DIRECTOR 0.30 0.10 X 0 0 0 BRYAN CASE DIRECTOR 3.00 X 15300 0 0 CHRIS CHRISTENSEN DIRECTOR 5.00 X 29300 0 0 KENNETH COLBURN DIRECTOR 9.00 X 21600 0 0 MICHAEL CROSS DIRECTOR 1.00 X 9000 0 0 MICHELLE DAVIA DIRECTOR 4.00 X 24550 0 0 MARION DENGER DIRECTOR 20.00 X 20800 0 0 KEVIN DODDRIDGE DIRECTOR 1.00 X 15300 0 0 DANIEL DYER DIRECTOR 3.00 X 9050 0 9600 ROY FRIEDERSDORF DIRECTOR 4.60 0.40 X 25850 0 0 SANDRA GREEN DIRECTOR 3.60 0.40 X 21600 0 0 SCOTT HALLOWELL DIRECTOR 5.00 X 22950 0 0 CHRISTOPHER HAMON DIRECTOR 9.00 X 18900 0 0 WILLIAM HART DIRECTOR 8.00 X 33150 0 0 MARK HOFER DIRECTOR 5.60 0.40 X 24550 0 0 DAVID IHA DIRECTOR 6.00 X 27700 0 0 LYNN JACOBSON DIRECTOR 6.00 X 16800 0 5400 KERRY KELTON DIRECTOR 11.60 0.40 X 51000 0 0 MEERA KOHLER DIRECTOR 10.60 0.40 X 41750 0 0 THOMAS MADSEN DIRECTOR 5.00 X 7800 0 14050 JOSEPH MARTIN DIRECTOR 5.00 X 20700 0 0 THOMAS MCQUISTON DIRECTOR 8.00 X 34750 0 0 GALEN MILLS DIRECTOR 6.00 X 17200 0 12050 JESSICA NELSON DIRECTOR 7.00 X 18250 0 0 WILLIAM NOEL DIRECTOR 6.00 X 18000 0 0 CURTIS NOLAN DIRECTOR 6.60 0.40 X 25200 0 0 RANDY PAPENHAUSEN DIRECTOR 6.00 X 17350 0 0 MICHAEL PETERSON DIRECTOR 4.00 X 11700 0 0 GARY POTTER DIRECTOR 5.00 X 23650 0 0 TOM PURKEY DIRECTOR 5.00 X 17100 0 0 REUBEN RITTHALER DIRECTOR 5.00 X 38150 0 0 LANNY RODGERS DIRECTOR 7.00 X 12450 0 18000 KEITH ROSS DIRECTOR 6.00 X 22150 0 0 RONALD SCHWARTAU DIRECTOR 8.60 0.40 X 23075 0 11875 CHARLES SHORT DIRECTOR 4.60 0.40 X 32900 0 0 KELLEY SMITH DIRECTOR 5.00 X 22750 0 0 TIMOTHY SMITH DIRECTOR 6.00 X 0 0 0 DAVID SPRADLIN DIRECTOR 6.00 X 23650 0 0 STEVEN WALTER DIRECTOR 9.00 1.00 X 33100 0 0 GREG WHITE DIRECTOR 7.00 X 26350 0 0 MICHAEL WILLIAMS DIRECTOR 3.00 1.00 X 17100 0 0 BRYAN WOLFE DIRECTOR 20.60 0.40 X 30100 0 0 JEFFREY CONNOR INTERIM CEO AND COO 51.80 1.20 X 511592 0 76415 VENEICIA LOCKHART ASST TREAS; SR. VP, FINANCE 45.80 1.20 X 355441 0 191148 JIM MATHESON CHIEF EXECUTIVE OFFICER 45.00 1.00 X 580647 0 18333 JAMES BAUSELL SR. VP, COMMUNICATIONS 55.00 X 453980 0 32227 PETER BAXTER SR. VP, INSURANCE & FINANCIAL SERVICES 58.00 X 529529 0 180435 MARC BRESLAW EXEC DIRECTOR, INT'L FOUNDATION 1.00 47.00 X 201283 0 31027 KIRK JOHNSON SR. VP, GOVERNMENT RELATIONS 61.00 X 365996 0 127984 MARTIN LOWERY EXEC. VP, MEMBER & ASSOC. RELATIONS 40.00 X 585994 0 110993 MARY MCLAURY COO, TOUCHSTONE ENERGY 42.00 X 247966 0 91611 RICHARD MEYER SR. VP, GENERAL COUNSEL 45.00 X 356332 0 131833 MARY PAT PARIS VP, ADMINISTRATION 45.00 X 222714 0 73189 MICHELLE RINN SR. VP, HUMAN RESOURCES 47.00 X 167320 0 61418 SHAARA ROMAN SR. VP, HUMAN RESOURCES 41.00 X 222990 0 60988 DANIELLE SIEVERLING CHIEF RISK AND COMPLIANCE OFFICER 53.00 X 304804 0 79311 JIM SPIERS VP, BUSINESS AND TECH. STRATEGIES 40.00 X 358958 0 86854 TOM STANGROOM SR. VP & CIO 49.00 X 410587 0 194722 TRACEY STEINER SR. VP, EDUCATION & TRAINING 51.00 X 290977 0 139745 ROBERT DOUGAN SR. DIRECTOR, RETIREMENT PROJECTS 41.00 X 363394 0 110844 PATRICIA FENZEL SR. PRINCIPAL, IT PROJECT MANAGER 43.00 X 336188 0 77224 STEVE SANKER VP, IF&S RELATIONSHIP MGT. 66.00 X 407196 0 79638 MONICA SCHMIDT VP, NATIONAL CONSULTING GROUP 47.00 X 287870 0 127504 JOHN SZCZUR VP, INVESTMENT STRAT. & PERF. 40.00 X 697152 0 143885 JO ANN EMERSON FORMER CHIEF EXECUTIVE OFF 0.00 X 1231026 0 69994 PATRICK GIOFFRE FORMER EXEC VP, INTERNAL SERVICES 0.00 X 117803 0 0 STEPHEN KASZYNSKI FORMER CEO, HOMESTEAD FUNDS 51.00 X 0 933905 143613 10850964 933905 2511910 379 1 1 0 CROWELL & MORING LLP 1001 PENNSYLVANIA AVE NW WASHINGTON DC 20004 LEGAL SERVICES 1207524 ASGK PUBLIC STRATEGIES LLC 222 W MERCH MART PLZ STE 2400 CHICAGO IL 60654 CONSULTING SERVICES 977682 HUGE LLC 45 MAIN ST STE 200 BROOKLYN NY 11201 IT RELATED SERVICES 621484 CORESITE LP 1050 17TH ST STE 8 DENVER CO 80266 COMPUTER SERVICES 591530 HUNTON & WILLIAMS LLP 1900 K STREET NW WASHINGTON DC 20006 LEGAL SERVICES 586859 39 2222312 2222312 REIMBURSED COSTS 524292 103742645 103742645 MEMBERSHIP DUES 900099 31513567 31513567 TRAINING & PROFESSIONAL SERVICES 541900 9958279 6619758 3338521 ADVERTISING INCOME 511120 1882571 1882571 SUBSCRIPTION INCOME 511120 1083121 1083121 12142109 10965134 1176975 160322292 178981 178981 752217 88139 664078 13211145 7335452 5875693 5875693 5875693 MEETINGS & CONFERENCES 541900 9442682 9442682 9442682 178794177 169509720 7062145 0 10881025 69367579 18162830 10266208 5272887 184065 2414868 131541 572289 14896631 481245 3862991 1796949 2368770 6010935 6167680 6288862 445295 UBIT 486512 EQUIPMENT MAINTENANCE 3700609 CONTRACTED PERSONNEL 1846835 ELECTRONIC SUBSCRIPTION 1562414 13762949 180931969 22059388 16863976 31602376 35027613 41467 39673 4428292 5520917 157967244 69756915 87740386 88210329 143762 16120992 21022312 13334179 12666666 12490470 179704649 187608149 21982661 19795839 36822690 44559734 370139 355630 33270737 33767033 92446227 98478236 X 0 0 0 0 87258422 89129913 87258422 89129913 179704649 187608149 X -2137792 4009283 X X 0 1 X 1 1 1 50800 50800 50800 1 DEMOCRATIC PARTY OF VIRGINIA 919 EAST MAIN STREET SUITE 2050 RICHMOND VA 23219 540495203 15000 DEMOCRATIC PARTY OF NEW MEXICO 322 ADAMS ST SE ALBUQUERQUE NM 87108 850032555 10800 REPUBLICAN PARTY OF FLORIDA 420 E JEFFERSON STREET TALLAHASSEE FL 32301 590683241 15000 FLORIDA DEMOCRATIC PARTY 214 S BRONOUGH ST TALLAHASSEE FL 32301 590772903 10000 0 0 0 30513567 2750000 2750000 4096764 -1346764 PART I-A, LINE 1: CONTRIBUTIONS TO STATE POLITICAL PARTY COMMITTEES 0 1 X 11916966 11916966 88282173 32555760 55726413 19131564 10731663 8399901 38636541 26469492 12167049 88210329 12311637 C CAPITAL TERM CERTIFICATES 827307 C COLLATERAL CERTIFICATES OF DEPOSIT 195235 C 13334179 PATRONAGE CAPITAL CERTIFICATES 523495 DEFERRED COMPENSATION FUND (EMPLOYEES) 10941880 TENANT ESCROW 355630 EMPLOYEE AND EXECUTIVE OPTION PURCHASE PLAN 669465 12490470 POST RETIREMENT BENEFITS OTHER THAN PENSIONS 19172495 DEF COMP FUND (EMPLOYEES) 10941881 EMPLOYEE & EXEC OPT PLAN 662989 COOPERATIVE RESEARCH NETWORK FUND 2868237 OTHER RESTRICTED FUNDS 121431 33767033 X 226533687 47739510 47739510 178794177 0 178794177 224962196 44030227 44030227 180931969 0 180931969 PART IV, LINE 2B: SECURITY DEPOSITS/ESCROW AMOUNTS ARE HELD FOR BUILDING TENANTS PART X, LINE 2: NRECA ADOPTED THE PROVISIONS OF FASB INTERPRETATION NO. 48, ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES, DURING THE YEAR ENDING DECEMBER 31, 2007. FOR THE PERIOD FROM NRECA'S INCEPTION TO DECEMBER 31, 2016, NO UNRECOGNIZED TAX PROVISION OR BENEFIT EXISTS. PART XI, LINE 2D - OTHER ADJUSTMENTS: REV FROM SUBS NOT INCLUDED IN FORM 990 LESS TENANT EXPENSES ON PART VII, 6B 47,739,510. PART XII, LINE 2D - OTHER ADJUSTMENTS: EXP FROM SUBS NOT INCLUDED IN 990 PLUS TENANT EXP PART VIII, LINE 6B 44,030,227. X X 1 1 X X X X X 1 1 1 JEFFREY CONNOR INTERIM CEO AND COO 379754 0 200 0 131638 0 40349 0 36066 0 588007 0 0 0 VENEICIA LOCKHART ASST TREAS; SR. VP, FINANCE 319316 0 30700 0 5425 0 157991 0 33157 0 546589 0 0 0 JIM MATHESON CHIEF EXECUTIVE OFFICER 478166 0 100200 0 2281 0 2323 0 16010 0 598980 0 0 0 JAMES BAUSELL SR. VP, COMMUNICATIONS 296765 0 0 0 157215 0 13566 0 18661 0 486207 0 0 0 PETER BAXTER SR. VP, INSURANCE & FINANCIAL SERVIC 468799 0 45200 0 15530 0 144531 0 35904 0 709964 0 0 0 MARC BRESLAW EXEC DIRECTOR, INT'L FOUNDATION 150219 0 0 0 51064 0 9732 0 21295 0 232310 0 0 0 KIRK JOHNSON SR. VP, GOVERNMENT RELATIONS 359176 0 200 0 6620 0 98832 0 29152 0 493980 0 0 0 MARTIN LOWERY EXEC. VP, MEMBER & ASSOC. RELATIONS 496268 0 200 0 89526 0 81094 0 29899 0 696987 0 0 0 MARY MCLAURY COO, TOUCHSTONE ENERGY 244253 0 200 0 3513 0 77683 0 13928 0 339577 0 0 0 RICHARD MEYER SR. VP, GENERAL COUNSEL 324679 0 200 0 31453 0 91384 0 40449 0 488165 0 0 0 MARY PAT PARIS VP, ADMINISTRATION 214148 0 6575 0 1991 0 56898 0 16291 0 295903 0 0 0 MICHELLE RINN SR. VP, HUMAN RESOURCES 166254 0 200 0 866 0 40064 0 21354 0 228738 0 0 0 SHAARA ROMAN SR. VP, HUMAN RESOURCES 33580 0 0 0 189410 0 59740 0 1248 0 283978 0 0 0 DANIELLE SIEVERLING CHIEF RISK AND COMPLIANCE OFFICER 298125 0 1000 0 5679 0 72628 0 6683 0 384115 0 0 0 JIM SPIERS VP, BUSINESS AND TECH. STRATEGIES 307521 0 17160 0 34277 0 59247 0 27607 0 445812 0 0 0 TOM STANGROOM SR. VP & CIO 398672 0 200 0 11715 0 159320 0 35402 0 605309 0 0 0 TRACEY STEINER SR. VP, EDUCATION & TRAINING 285455 0 200 0 5322 0 134039 0 5706 0 430722 0 0 0 ROBERT DOUGAN SR. DIRECTOR, RETIREMENT PROJECTS 217230 0 200 0 145964 0 82222 0 28622 0 474238 0 0 0 PATRICIA FENZEL SR. PRINCIPAL, IT PROJECT MANAGER 194571 0 200 0 141417 0 61239 0 15985 0 413412 0 0 0 STEVE SANKER VP, IF&S RELATIONSHIP MGT. 323132 0 200 0 83864 0 51616 0 28022 0 486834 0 0 0 MONICA SCHMIDT VP, NATIONAL CONSULTING GROUP 283834 0 350 0 3686 0 102981 0 24523 0 415374 0 0 0 JOHN SZCZUR VP, INVESTMENT STRAT. & PERF. 349095 0 265475 0 82582 0 108853 0 35032 0 841037 0 0 0 JO ANN EMERSON FORMER CHIEF EXECUTIVE OFF 7652 0 0 0 1223374 0 67239 0 2755 0 1301020 0 0 0 PATRICK GIOFFRE FORMER EXEC VP, INTERNAL SERVICES 0 0 0 0 117803 0 0 0 0 0 117803 0 0 0 STEPHEN KASZYNSKI FORMER CEO, HOMESTEAD FUNDS 0 398830 0 523181 0 11894 0 116287 0 27326 0 1077518 0 0 PART I, LINE 1A TRAVEL FOR COMPANIONS - ACCORDING TO NRECA BOARD POLICY, THE SPOUSES OF THE PRESIDENT AND CEO CAN ACCOMPANY THEM ON A TRIP WHEREVER THERE WILL BE OFFICIAL FUNCTIONS FOR WHICH SPOUSES ARE RESPONSIBLE FOR ATTENDING. TAX IDENTIFICATION AND GROSS UP PAYMENTS: NRECA GROSSES UP PAYMENTS MADE TO STAFF UNDER THE EXECUTIVE 401(K) BONUS PLAN AND ON ELIGIBLE RELOCATION EXPENSES. PART I, LINES 4A-C PART I, LINE 4A: THE FOLLOWING CURRENT AND FORMER EMPLOYEES RECEIVED A SEVERANCE PAYMENT. THESE AMOUNTS ARE INCLUDED AND REPORTED IN PART II, COLUMN B(III): MARC BRESLAW ($47,000); JO ANN EMERSON ($1,167,000); SHAARA ROMAN ($188,983) PART I, LINE 4B: THE FOLLOWING CURRENT AND FORMER EMPLOYEES RECEIVED PAYMENTS FROM AN EXECUTIVE NONQUALIFIED RETIREMENT PLAN. THESE AMOUNTS ARE INCLUDED AND REPORTED IN PART II, COLUMN B(III): JAMES BAUSELL ($150,553); ROBERT DOUGAN ($142,736); PATRICIA FENZEL ($138,660); MARTIN LOWERY ($61,744); RICHARD MEYER ($18,489); STEVE SANKER ($76,221); JIM SPIERS ($27,220); JOHN SZCZUR ($75,000) PART I, LINE 4C: THE FOLLOWING FORMER EMPLOYEE RECEIVED A PAYMENT ON AN EQUITY-BASED COMPENSATION ARRANGEMENT. THESE AMOUNTS ARE INCLUDED AND REPORTED IN PART II, COLUMN B(III): PATRICK GIOFFRE ($117,803) COOPERATING ENERGY SERVICES FOR PROFIT SUBSIDIARY-2 OFCS AND 1 KEY EE SERVE AS OFCS AND DIRS 275501 ADMINISTRATIVE SERVICES AGREEMENT 0 RE ADVISERS CORPORATION AND RE INVESTMENT CORPORATION FOR PROFIT SUBSIDIARY- 2 KEY EES AND 1 FRM OFC SERVE AS OFCS AND DIRS 16420055 ROYALTY PAYMENTS AND ADMISTRATIVE SERVICES AGREEMENT 0 COOPERATING BENEFIT ADMINISTRATORS FOR PROFIT SUBSIDIARY-1 OFFICER AND 1 KEY EMPLOYEE SERVE AS DIRECTORS 14343087 ADMINISTRATIVE SERVICES AGREEMENT 0 ELECTRIC COOPERATIVE LIFE INSURANCE FOR PROFIT SUBSIDIARY-1 OFFICER SERVES AS A DIRECTOR 0 ADMINISTRATIVE SERVICES AGREEMENT 0 NRECA UNITED FOR PROFIT SUBSIDIARY-2 OFFICERS AND 1 KEY EE SERVE AS OFCS AND DIRS 25746 EXPENSE REIMBURSEMENT 0 COOPERATING INSURANCE SERVICES FOR PROFIT SUBSIDIARY-1 OFFICER SERVES AS A DIRECTOR 451509 ADMINISTRATIVE SERVICES AGREEMENT 0 ARKANSAS ELECTRIC COOPERATIVE CORPORATION FOR PROFIT MEMBER OF NRECA WITH SHARED DIRECTOR MEL COLEMAN 865753 VARIOUS SERVICES PROVIDED TO MEMBER 0 BASIN ELECTRIC POWER COOPERATIVE FOR PROFIT MEMBER OF NRECA WITH SHARED DIRECTOR REUBEN RITTHALER 920166 VARIOUS SERVICES PROVIDED TO MEMBER 0 KAMO POWER FOR PROFIT MEMBER OF NRECA WITH SHARED DIRECTOR TIMOTHY SMITH 362771 VARIOUS SERVICES PROVIDED TO MEMBER 0 SHO-ME POWER FOR PROFIT MEMBER OF NRECA WITH SHARED DIRECTOR CHRISTOPHER HAMON 226473 VARIOUS SERVICES PROVIDED TO MEMBER 0 WESTERN FARMERS EC FOR PROFIT MEMBERSHIP WITH SHARED DIRECTOR TIMOTHY SMITH 575121 VARIOUS SERVICES PROVIDED TO MEMBER 0 SCHEDULE L, PART IV RELATIONSHIP BETWEEN INTERESTED PERSON AND ORGANIZATION (A) COOPERATING ENERGY SERVICES(B) 2 OFFICERS (JEFFREY CONNOR AND VENEICIA LOCKHART) AND 1 KEY EMPLOYEE (MARTIN LOWERY) SERVE AS OFFICERS AND DIRECTORS.(A) RE ADVISERS CORPORATION AND RE INVESTMENT CORPORATION(B) 2 KEY EMPLOYEES (DANIELLE SIEVERLING AND MARTIN LOWERY) AND 1 FORMER OFFICER (STEPHEN KASZYNSKI) SERVE AS OFFICERS AND DIRECTORS(A) COOPERATING BENEFIT ADMINISTRATORS(B) 1 OFFICER (VENEICIA LOCKHART) AND 1 KEY EMPLOYEE (PETER BAXTER) SERVE AS DIRECTORS.(A) ELECTRIC COOPERATIVE LIFE INSURANCE COMPANY(B) 1 OFFICER (VENEICIA LOCKHART) SERVES AS A DIRECTOR.(A) NRECA UNITED(B) 2 OFFICERS (JEFFREY CONNOR AND VENEICIA LOCKHART) AND 1 KEY EMPLOYEE (MARTIN LOWERY) SERVE AS OFFICERS AND DIRECTORS.(A) COOPERATING INSURANCE SERVICES(B) 1 OFFICER (VENEICIA LOCKHART) SERVES AS A DIRECTOR. FORM 990, PART VI, SECTION A, LINE 2 BUSINESS RELATIONSHIPS EXIST BETWEEN SOME NRECA OFFICERS AND KEY EMPLOYEES WHO ALSO SERVE AS DIRECTORS OR OFFICERS OF THE FOLLOWING NRECA SUBSIDIARIES AND AFFILIATED ENTITIES: NRECA UNITED; COOPERATING ENERGY SERVICES; RE ADVISERS CORPORATION; RE INVESTMENT CORPORATION; COOPERATING BENEFIT ADMINISTRATORS; ELECTRIC COOPERATIVE LIFE INSURANCE COMPANY; AND COOPERATING INSURANCE SERVICES. REFER TO SCHEDULE L, PART V FOR IDENTIFIED PERSONS. FORM 990, PART VI, SECTION A, LINE 6 ALL NRECA VOTING MEMBERS MUST BE ENTITIES WHOSE OPERATIONS ARE CONSISTENT, AS DETERMINED BY THE BOARD OF DIRECTORS, WITH THE INTERNATIONAL COOPERATIVE ALLIANCE COOPERATIVE PRINCIPLES AND THE OBJECTIVES OF NRECA AND FALL INTO ONE OF THE FOLLOWING THREE CATEGORIES: (1) DISTRIBUTION (ELECTRIC DISTRIBUTION COOPERATIVES OR NONPROFIT ASSOCIATIONS, NONPROFIT CORPORATIONS, PUBLIC UTILITY DISTRICTS, OR GOVERNMENT CORPORATIONS OR AUTHORITIES LOCATED IN A STATE, TERRITORY, POSSESSION OR COMMONWEALTH OF THE U.S. AND PRIMARILY ENGAGED IN FURNISHING ELECTRICITY AT RETAIL TO THEIR CONSUMERS); (2) GENERATION AND TRANSMISSION (COOPERATIVES OR NONPROFIT ASSOCIATIONS, NONPROFIT CORPORATIONS, OR PUBLIC UTILITY DISTRICTS LOCATED IN A STATE, TERRITORY, POSSESSION OR COMMONWEALTH OF THE U.S. AND PRIMARILY ENGAGED IN THE MARKETING, GENERATION AND/OR TRANSMISSION OF WHOLESALE BULK ELECTRICITY FOR SALE TO OTHERS FOR THE PURPOSE OF RESALE); AND (3) SERVICE MEMBERS (ORGANIZATIONS NOT ACTUALLY ENGAGED IN THE MARKETING, GENERATION, TRANSMISSION OR DISTRIBUTION OF ELECTRICITY, BUT A SIGNIFICANT NUMBER OF WHOSE VOTING MEMBERS CONSIST OF NRECA DISTRIBUTION, OR GENERATION AND TRANSMISSION VOTING MEMBERS). FORM 990, PART VI, SECTION A, LINE 7A THE NRECA BOARD OF DIRECTORS IS COMPOSED OF 47 PERSONS, ONE FROM EACH STATE WHERE THERE IS AN OPERATING ELECTRIC SYSTEM WITH MEMBERSHIP IN NRECA. DIRECTORS, EACH OF WHOM MUST BE A MEMBER, DIRECTOR, OFFICER, OR EMPLOYEE OF AN NRECA MEMBER SYSTEM, ARE ELECTED EVERY TWO YEARS BY THE MEMBER SYSTEMS IN EACH STATE. THEIR TERMS RUN FROM THE CLOSE OF EACH NRECA ANNUAL MEETING (USUALLY HELD IN MARCH) TO THE CLOSE OF THE ANNUAL MEETING TWO YEARS HENCE. THE NRECA PRESIDENT, VICE PRESIDENT, AND SECRETARY TREASURER ARE ELECTED EVERY TWO YEARS BY THE BOARD FROM AMONG ITS MEMBERS. THE CHIEF EXECUTIVE OFFICER IS ALSO SELECTED BY THE BOARD. FORM 990, PART VI, SECTION A, LINE 7B NRECA VOTING MEMBERS ARE DESCRIBED IN THE SCHEDULE O, PART VI, SECTION A, LINE 6 DESCRIPTION. THE FOLLOWING GOVERNANCE DECISIONS REQUIRE THE APPROVAL OF NRECA VOTING MEMBERS: (1) ARTICLES OF INCORPORATION AMENDMENTS; (2) BYLAW ADOPTION, AMENDMENT, OR REPEAL, WHICH INCLUDES CHANGES TO THE METHODS OF CALCULATING THE DUES OF DISTRIBUTION MEMBERS, OF GENERATION AND TRANSMISSION MEMBERS, AND OF STATEWIDE MEMBERS; (3) EXPULSION OF NRECA MEMBERS; (4) REMOVAL OF A NRECA DIRECTOR IS SUBJECT TO THE APPROVAL OF NRECA VOTING MEMBER LOCATED IN THE STATE FROM WHICH THE DIRECTOR WAS ELECTED; (5) A SALE, LEASE, EXCHANGE, OR CERTAIN DISPOSITIONS OF ASSETS LEAVING THE ASSOCIATION WITHOUT A SIGNIFICANT CONTINUING BUSINESS ACTIVITY; (6) MERGER; (7) DOMESTICATION IN A FOREIGN JURISDICTION; AND (8) DISSOLUTION. EACH NRECA VOTING MEMBER HAS ONE VOTE. FORM 990, PART VI, SECTION B, LINE 11B THE DIRECTOR OF CORPORATE ACCOUNTING AND SENIOR VP OF FINANCE REVIEW THE FORM 990 AND SUPPORTING WORK PAPERS IN DETAIL. THE FORM 990 IS THEN PROVIDED TO THE NRECA BOARD OF DIRECTORS THROUGH THEIR ELECTRONIC BOARD PORTAL FOR THEIR REVIEW AND COMMENTS IN ADVANCE OF THE RETURN BEING FILED. FORM 990, PART VI, SECTION B, LINE 12C EACH KEY EMPLOYEE IS SUBJECT TO A CONFLICT OF INTEREST POLICY AND REQUIRED TO ANNUALLY COMPLETE AND SUBMIT A CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM TO THE SENIOR VP OF FINANCE WHO, WITH ASSISTANCE AS NEEDED FROM HUMAN RESOURCES AND/OR THE GENERAL COUNSEL, INVESTIGATES POTENTIAL OR ACTUAL CONFLICTS. THE CEO, OR HIS OR HER DESIGNEE, HAS FINAL AUTHORITY FOR DETERMINING WHETHER OR NOT A CONFLICT HAS OCCURRED. IF THE CEO IS IMPLICATED, THE BOARD'S ADMINISTRATIVE COMMITTEE IS THE FINAL AUTHORITY. IN ADDITION TO THE CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM, EACH KEY EMPLOYEE ANNUALLY SUBMITS A FORM 990 QUESTIONNAIRE TO THE SENIOR VP OF FINANCE. EACH DIRECTOR IS REQUIRED TO ANNUALLY COMPLETE AND SUBMIT A CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM. DIRECTOR FORMS DISCLOSING ANY MATERIAL FACT KNOWN TO THE DIRECTOR REGARDING ANY POTENTIAL OR ACTUAL VIOLATION OF THE POLICY ARE SUBMITTED TO THE OFFICE OF GENERAL COUNSEL, NRECA PRESIDENT, NRECA VICE PRESIDENT, AND NRECA SECRETARY-TREASURER. UPON REQUEST OF THE PRESIDENT, EXECUTIVE COMMITTEE, OR ANY FIVE DIRECTORS, THE BOARD DETERMINES WHETHER A DIRECTOR COMPLIES WITH THE POLICY. IN MAKING THIS DETERMINATION, THE BOARD NOTIFIES THE DIRECTOR, A COMMITTEE IS CREATED AND APPOINTED TO INVESTIGATE AND MAKE A RECOMMENDATION, THE DIRECTOR MAY COMMENT, AND THE DIRECTOR MAY BE REQUIRED TO BE ABSENT DURING CONSIDERATION. IF THE BOARD DETERMINES THAT A DIRECTOR FAILS TO COMPLY WITH THE POLICY, THEN, UNLESS THE BOARD DETERMINES OTHERWISE FOR GOOD CAUSE, OR THE DIRECTOR COMPLIES WITH THE POLICY WITHIN 30 DAYS, THE DIRECTOR IS DISQUALIFIED AND NO LONGER A DIRECTOR. IN ADDITION TO THE CONFLICT OF INTEREST CERTIFICATION AND DISCLOSURE FORM, EACH DIRECTOR ANNUALLY COMPLETES AND SUBMITS A FORM 990 QUESTIONNAIRE. FORM 990, PART VI, SECTION B, LINE 15 LINE 15A (CEO COMPENSATION): THE CEO EVALUATION COMMITTEE OF THE BOARD IS RESPONSIBLE FOR MAKING RECOMMENDATIONS TO THE BOARD CONCERNING FORMAT AND METHODS TO PROPERLY EVALUATE THE PERFORMANCE OF THE CEO. AN OUTSIDE CONSULTANT (E.G., QUATT ASSOCIATES) REVIEWS INDEPENDENT COMPENSATION STUDIES ANNUALLY TO VERIFY THE CEO'S COMPENSATION IS WITHIN A COMPETITIVE RANGE FOR THE CEOS OF COMPARABLE ORGANIZATIONS AND PROVIDES THIS INFORMATION TO THE COMMITTEE. THE COMMITTEE REVIEWS COMPETITIVE SALARY SURVEY DATA PROVIDED BY THE OUTSIDE CONSULTANTS AND DEVELOPS A COMPENSATION RECOMMENDATION THAT IS PRESENTED TO THE BOARD. THE BOARD REVIEWS AND APPROVES THE CEO'S COMPENSATION ANNUALLY. LINE 15B (OTHER OFFICERS/KEY EMPLOYEE COMPENSATION): NRECA'S HUMAN RESOURCES DEPARTMENT HAS A MARKET PAY TOOL THAT USES CURRENT PAY DATA FROM PURCHASED COMPENSATION STUDIES TO ANALYZE SALARIES FOR POSITIONS WITHIN THE ORGANIZATION. NRECA HAS WRITTEN POLICIES AND PROCEDURES GOVERNING ITS SALARY INCREASE PROCESS. THE SALARY INCREASE PROCESS IS INTENDED TO ENABLE MANAGERS TO MAKE RATIONAL DECISIONS CONCERNING SALARY ACTIONS WITHIN THE ASSOCIATION'S BUDGETING CONSTRAINTS. HOWEVER, IT DOES NOT GUARANTEE AN INCREASE TO ANY EMPLOYEE. THE SALARY PROCESS IS COMPRISED OF THE FOLLOWING STEPS: (1) APPROVAL OF NRECA'S SALARY BUDGET BY THE NRECA BOARD OF DIRECTORS; (2) COMPLETION OF WRITTEN ANNUAL PERFORMANCE SUMMARIES FOR EACH EMPLOYEE BY HIS/HER MANAGER; (3) RECOMMENDATION OF SALARY INCREASES OR LUMP SUM AWARDS FOR INDIVIDUAL EMPLOYEES BASED UPON PERFORMANCE/CONTRIBUTION; (4) ANALYSIS, REVIEW, AND APPROVAL OF SALARY INCREASE RECOMMENDATIONS BY HUMAN RESOURCES AND THE CHIEF EXECUTIVE OFFICER; AND (5) COMMUNICATION OF SALARY INCREASE DECISIONS TO STAFF. FORM 990, PART VI, SECTION C, LINE 19 THE NRECA ARTICLES OF INCORPORATION, BYLAWS AND AUDITED FINANCIAL STATEMENTS ARE AVAILABLE TO NRECA VOTING MEMBERS ON THE MEMBER-ONLY SECTION OF COOPERATIVE.COM, WHICH IS A WEBSITE FOR NRECA MEMBERS AND AFFILIATED ENTITIES. NRECA NOTIFIES VOTING MEMBERS WHEN THE AUDITED FINANCIAL STATEMENTS FOR THE PRECEDING FISCAL YEAR HAVE BEEN POSTED ON COOPERATIVE.COM. NRECA DISTRIBUTES A COPY OF ITS ANNUAL REPORT TO EACH NRECA VOTING MEMBER AND MAKES THE ANNUAL REPORT AVAILABLE TO THE PUBLIC ON ELECTRIC.COOP. NRECA WILL ALSO PROVIDE COPIES OF ITS FORM 990 TO THE GENERAL PUBLIC UPON REQUEST. FORM 990, PART XI, LINE 9: NET INCOME OF SUBSIDIARIES 4,009,283. FORM 990, PART XII, LINE 2C: THIS PROCESS HAS NOT CHANGED FROM THE PRIOR YEAR BUT IN 2016 THE BOARD ADOPTED POLICY AMENDMENTS TO CLARIFY AUDIT RESPONSIBILITIES FOR NRECA AND OTHER ORGANIZATIONS. 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