2014-10-08T09:14:02-05:00 2013-12-31 861065772 DELOITTE TAX LLP 201 E KENNEDY BLVD SUITE 1200 TAMPA FL 33602 990 2013-01-01 203700526 SANTAFE SENIOR LIVING INC SANT 3523728400 SANTAFE HEALTHCAREINC PO BOX 749 GAINESVILLE FL 326270749 RANDY STUART TREASURER 3523378730 2014-09-30 1 STEVEN E ROVNER P00648526 8132738300 2013 2015-11-30 17:44:51Z MICHAEL P GALLAGHER SANTAFE HEALTHCAREINC PO BOX 749 GAINESVILLE FL 326270749 14001310 0 X SANTAFEHEALTHCAREFL.ORG X 2005 FL SANTAFE SENIOR LIVING, INC. CREATES AND SUSTAINS PREEMINENT SENIOR LIVING COMMUNITIES. THE PRIMARY EXEMPT PURPOSE OF SANTAFE SENIOR LIVING, INC. IS TO GOVERN AND CARRY OUT THE PURPOSES OF A SYSTEM OF TAX-EXEMPT CHARITABLE ORGANIZATIONS THAT ACQUIRE, OWN, OPERATE, AND MAINTAIN FACILITIES AND SERVICES DESIGNED TO MEET THE PHYSICAL, SOCIAL, EMOTIONAL AND SPIRITUAL NEEDS OF SENIOR INDIVIDUALS. 5 0 0 0 0 0 2706869 12528575 897628 1137421 309050 335314 0 0 3913547 14001310 2706869 12528575 0 0 0 0 0 0 0 2108427 2824536 4815296 15353111 -901749 -1351801 12574874 14590771 16578655 19946353 -4003781 -5355582 X TO CREATE AND SUSTAIN PREEMINENT SENIOR LIVING COMMUNITIES THAT PROVIDE A CONTINUUM OF SERVICES IN HOUSING, HEALTH CARE AND OTHER PROGRAMS TO ENHANCE THE QUALITY AND DIGNITY OF LIFE. 0 0 737174 646114 DURING 2013, SANTAFE SENIOR LIVING, INC. OVERSAW CONSTRUCTION OF A CONTINUING CARE RETIREMENT COMMUNITY IN SOUTHWEST FLORIDA. THE COMMUNITY, BONITA SPRINGS RETIREMENT VILLAGE, INC. (DBA THE TERRACES AT BONITA SPRINGS) OPENED ON JULY 1, 2013. THE TERRACES AT BONITA SPRINGS SERVED 208 RESIDENTS WITH HOUSING, HEALTHCARE AND RELATED SERVICES DURING 2013. 422264 370104 DURING THE YEAR, SANTAFE SENIOR LIVING, INC. PROVIDED OVERSIGHT GOVERNANCE AND DEVELOPMENT PLANNING SERVICES TO NORTH FLORIDA RETIREMENT VILLAGE, INC. (DBA THE VILLAGE). THE VILLAGE SERVED AN AVERAGE PER DAY OF 657 SENIOR CITIZEN RESIDENTS WITH ROUND THE CLOCK HOUSING, ASSISTED LIVING AND RELATED SERVICES DURING 2013. 302569 121203 SANTAFE SENIOR LIVING, INC. PROVIDED OVERSIGHT GOVERNANCE AND REDEVELOPMENT PLANNING SERVICES TO A RELATED CONTINUOUS CARE RETIREMENT COMMUNITY, EAST RIDGE RETIREMENT VILLAGE, INC. THIS FACILITY PROVIDED AN AVERAGE PER DAY OF 223 SENIOR CITIZEN RESIDENTS WITH HOUSING, HEALTH CARE AND RELATED SERVICES DURING THE YEAR. 12528575 12528575 SANTAFE SENIOR LIVING, INC., THROUGH ITS SUPPORTING ORGANIZATION,SANTAFE HEALTHCARE, PROVIDED FINANCIAL ASSISTANCE TO BAYVIEW GARDENS FOR OPERATION OF ITS RETIREMENT COMMUNITY IN THE AMOUNT OF $3,648,575.SANTAFE SENIOR LIVING, INC. THROUGH ITS SUPPORTED ORGANIZATION, BVG ACQUISITION, INC. PROVIDED FINANCIAL ASSISTANCE TO ITS SUPPORTING ORGANIZATION, SANTAFE HEALTHCARE, INC. IN THE AMOUNT OF $8,880,000. 12528575 12528575 13990582 1 1 0 1 0 0 0 0 0 0 0 0 0 1 1 1 0 1 0 0 0 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 1 17 0 1 0 0 0 0 0 0 0 0 0 0 0 X 5 0 0 0 0 0 0 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 X KATHY HARPER CONTROLLER 3525483593 4300 NW 89TH BLVD GAINESVILLE FL 326065688 MICHAEL P GALLAGHER CHAIRMAN/CHIEF EXECUTIVE OFFICER/DIRECTOR 1.00 59.00 X X 0 2238682 269719 TROY R HART PRESIDENT/VICE CHAIRMAN/DIRECTOR 5.00 45.00 X X 0 496831 82897 CATHERINE E AYERS SECRETARY/DIRECTOR 3.00 57.00 X X 0 648455 150751 RANDALL L STUART TREASURER/DIRECTOR 1.00 64.00 X X 0 775275 157949 STEVEN M ZIEGLER DIRECTOR 1.00 62.00 X 0 508883 130033 0 4668126 791349 0 0 1 0 0 12528575 12528575 MANAGEMENT FEES 561000 1137421 1137421 1137421 335314 335314 14001310 1137421 0 335314 12528575 12528575 2387869 1137421 1250448 23672 23672 2195 2195 137131 116098 21033 11620 1613 10007 25155 25155 62227 42190 20037 7518 50 7468 1183 1183 CORPORATE DEVELOPMENT 164285 164285 DUES & SUBSCRIPTIONS 1681 350 1331 15353111 13990582 1362529 0 158482 173643 6767204 7845192 5649188 6571936 12574874 14590771 22777 34546 16555878 19911807 16578655 19946353 X -4003781 -5355582 -4003781 -5355582 12574874 14590771 -1351801 0 X X 0 1 X 1 0 X X X X 0 0 0 SANTAFE SENIOR LIVING FOUNDATION INC 264464727 7 0 1 0 BVG ACQUISITION INC 203701186 9 0 1 1 3648575 EAST RIDGE RETIREMENT VILLAGE INC 590903331 9 0 1 0 BONITA SPRINGS RETIREMENT VILLAGE INC 262386152 9 0 1 0 NORTH FLORIDA RETIREMENT VILLAGE INC 591912330 9 0 1 0 5 3648575 SCHEDULE A, PART I, LINE 11H, COLUMN (IV): SANTAFE SENIOR LIVING, INC. IS A TYPE 1 SUPPORTING ORGANIZATION THAT IDENTIFIES ITS SUPPORTED ORGANIZATIONS BY CLASS OR PURPOSE IN ITS ARTICLES OF INCORPORATION IN ACCORDANCE WITH TREASURY REGULATION SECTION 1.509(A)4(D)(2)(B). RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 27092 27092 0 PART II-B, LINE 1: SANTAFE SENIOR LIVING, INC. ENGAGED REPRESENTATION TO LOBBY THE FLORIDA STATE LEGISLATURE ON ITS BEHALF REGARDING GENERAL ISSUES OF IMPORTANCE TO THE SENIOR LIVING INDUSTRY. 0 DUE FROM AFFILIATES 6571936 6571936 DUE TO AFFILIATES 19911807 19911807 X 1472735 0 1472735 12528575 12528575 14001310 2824536 0 2824536 12528575 12528575 15353111 PART X, LINE 2: EXPLANATION FOR UNCERTAIN TAX POSITIONS UNDER ASC 740: SANTAFE SENIOR LIVING, INC. (SFSL) DID NOT OBTAIN SEPARATE, INDEPENDENT AUDITED FINANCIAL STATEMENTS FOR 2013, BUT WAS INCLUDED IN THE COMBINED AUDITED FINANCIAL STATEMENTS OF SANTAFE HEALTHCARE, INC. (SFHC). THE TEXT OF THE ASC 740 FOOTNOTE IN THE COMBINED FINANCIAL STATEMENTS IS AS FOLLOWS: SFHC AND THE AFFILIATES HAVE NO UNCERTAIN TAX POSITIONS AS OF DECEMBER 31, 2013. SFHC AND AFFILIATES INCURRED NO INTEREST EXPENSE OR PENALTIES RELATED TO UNCERTAIN INCOME TAX PROVISIONS IN 2013 OR 2012. TAX YEARS 2010 THROUGH 2012 ARE SUBJECT TO EXAMINATION BY FEDERAL AND STATE TAXING AUTHORITIES. THERE ARE NO INCOME TAX EXAMINATIONS IN PROCESS AS OF THE DATE OF THIS REPORT. PART XI, LINE 4B - OTHER ADJUSTMENTS: DISTRIBUTION FROM SANTAFE HEALTHCARE 3,648,575. DISTRIBUTION FROM BAYVIEW GARDENS 8,880,000. PART XII, LINE 4B - OTHER ADJUSTMENTS: DISTRIBUTION TO BAYVIEW GARDENS 3,648,575. DISTRIBUTION TO SANTAFE HEALTHCARE 8,880,000. 1 BVG ACQUISITION INC DBA BAYVIEW GARDENS P O BOX 749 GAINESVILLE FL 326270749 203701186 501(C)3 3648575 SANTAFE SENIOR LIVING, INC., THROUGH ITS SUPPORTING ORGANIZATION, SANTAFE HEALTHCARE, INC, PROVIDED FINANCIAL ASSISTANCE IN THE AMOUNT OF $3,648,575 TO BAYVIEW GARDENS FOR OPERATION OF ITS RETIREMENT COMMUNITY. SANTAFE HEALTHCARE INC P O BOX 749 GAINESVILLE FL 326270749 592317607 501(C)3 8880000 SANTAFE SENIOR LIVING, INC. PROVIDED FINANCIAL ASSISTANCE IN THE AMOUNT OF $8,880,000 TO SUPPORT AND FURTHER THE MISSION AND TAX EXEMPT STATUS OF SANTAFE HEALTHCARE, INC. 2 PART I, LINE 2: SANTAFE SENIOR LIVING, INC., SANTAFE HEALTHCARE, INC., AND BAYVIEW GARDENS SHARE COMMON MANAGEMENT. AS A RESULT, MANAGEMENT ENSURES THE USE OF GRANT FUNDS BY BAYVIEW GARDENS AND SANTAFE HEALTHCARE, INC. IS CONSISTENT WITH THEIR INTENDED PURPOSE. 0 1 0 0 0 0 0 0 0 MICHAEL P GALLAGHER CHAIRMAN/CHIEF EXECUTIVE OFFICER/DIR 0 879090 0 870216 0 489376 0 244268 0 25451 0 2508401 0 204750 TROY R HART PRESIDENT/VICE CHAIRMAN/DIRECTOR 0 306900 0 138378 0 51553 0 63147 0 19750 0 579728 0 28377 CATHERINE E AYERS SECRETARY/DIRECTOR 0 311271 0 206569 0 130615 0 118061 0 32690 0 799206 0 61694 RANDALL L STUART TREASURER/DIRECTOR 0 372556 0 236136 0 166583 0 134571 0 23378 0 933224 0 70359 STEVEN M ZIEGLER DIRECTOR 0 315764 0 182501 0 10618 0 99376 0 30657 0 638916 0 29521 PART I, LINE 3 MICHAEL P GALLAGHER IS THE CHIEF EXECUTIVE OFFICER (CEO) OF SANTAFE SENIOR LIVING, INC. MR. GALLAGHER IS COMPENSATED BY SANTAFE HEALTHCARE, INC. (SANTAFE), A RELATED SUPPORTING ORGANIZATION. SANTAFE UTILIZES THE FOLLOWING PROCESS TO ESTABLISH THE CEO'S COMPENSATION AND BENEFITS: ANNUALLY, THE SANTAFE BOARD OF DIRECTORS RETAINS AN INDEPENDENT THIRD PARTY COMPENSATION AND BENEFITS CONSULTING FIRM TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF THE CEO'S TOTAL DIRECT COMPENSATION (BASE SALARY, ANNUAL INCENTIVES AND LONG TERM INCENTIVES) AND BENEFITS. THE COMPETITIVE ANALYSIS INCLUDES COMPARISON TO SIMILAR POSITIONS IN COMPANIES OF SIMILAR SIZE WITHIN THE SAME OR SIMILAR INDUSTRY. THE INDEPENDENT CONSULTING FIRM MAKES RECOMMENDATIONS, IF ANY, DIRECTLY TO THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS ESTABLISHES THE FINAL COMPENSATION AND BENEFIT PACKAGE FOR THE CEO TAKING INTO CONSIDERATION THE MARKET COMPETITIVENESS REVIEW AND FINAL RECOMMENDATION OF THE INDEPENDENT CONSULTING FIRM. THE INDEPENDENT CONSULTING FIRM PROVIDES AN OPINION LETTER REGARDING THE REASONABLENESS OF THE CEO'S FINAL COMPENSATION AND BENEFITS PACKAGE. THE ACTIONS OF THE BOARD ARE DOCUMENTED IN THE MINUTES OF THE BOARD MEETING. PART I, LINE 4B (RELATES TO PART I, LINE 4A): LISTED PERSONS ARE EMPLOYEES OF RELATED ORGANIZATIONS AND ARE COVERED BY A SEVERANCE POLICY FOR THEIR RESPECTIVE ORGANIZATION. THE SEVERANCE POLICY INCLUDES MONTHLY PAYMENTS UP TO A MAXIMUM OF 12 MONTHS UNDER QUALIFYING CIRCUMSTANCES. NO ONE LISTED RECEIVED SEVERANCE OR CHANGE OF CONTROL PAYMENTS DURING 2013. RELATES TO PART I, LINE 4B) LISTED PERSONS PARTICIPATING IN A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN THE YEAR: MICHAEL P GALLAGHER, TROY R HART AND RANDALL L STUART ARE EMPLOYEES OF SANTAFE HEALTHCARE, INC. (SANTAFE), A RELATED SUPPORTING ORGANIZATION. MR. GALLAGHER, MR. HART, AND MR. STUART PARTICIPATE IN TWO NONQUALIFIED DEFERRED COMPENSATION RETIREMENT PLANS SPONSORED BY SANTAFE FOR A CERTAIN GROUP OF EXECUTIVES. ONE PLAN RESTORES RETIREMENT BENEFITS EQUIVALENT TO QUALIFIED 401(K) BENEFITS ON INCOME EARNED IN EXCESS OF THE INTERNAL REVENUE SERVICE CODE SECTION 401 (A) (17) RECOGNIZABLE PAY LIMITS (A DEFINED CONTRIBUTION RESTORATION PLAN). VESTING FOR THIS PLAN IS ACHIEVED AT AGE 55 AND 10 YEARS OF SERVICE OR AT AGE 65 AND 5 YEARS OF SERVICE. THE SECOND SUPPLEMENTAL DEFINED CONTRIBUTION PLAN PROVIDES ADDITIONAL RETIREMENT INCOME BASED ON A PERCENTAGE OF BASE SALARY AND VESTS AT THREE AND FIVE YEARS OF SERVICE. MR. GALLAGHER RECEIVED $378,945 FROM SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS IN 2013. MR. HART RECEIVED $37,734 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2013. MR. STUART RECEIVED $149,343 FROM A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN 2013. STEVEN M ZIEGLER AND CATHERINE E AYERS ARE EMPLOYEES OF AVMED, INC. (AVMED) A RELATED TAX-EXEMPT ORGANIZATION. THEY PARTICIPATE IN TWO NONQUALIFIED DEFERRED COMPENSATION RETIREMENT PLANS SPONSORED BY AVMED FOR A CERTAIN GROUP OF EXECUTIVES. ONE PLAN RESTORES RETIREMENT BENEFITS EQUIVALENT TO QUALIFIED 401(K) BENEFITS ON INCOME EARNED IN EXCESS OF THE INTERNAL REVENUE SERVICE CODE SECTION 401 (A) (17) RECOGNIZABLE PAY LIMITS (A DEFINED CONTRIBUTION RESTORATION PLAN). VESTING FOR THIS PLAN IS ACHIEVED AT AGE 55 AND 10 YEARS OF SERVICE OR AT AGE 65 AND 5 YEARS OF SERVICE. THE SECOND SUPPLEMENTAL DEFINED CONTRIBUTION PLAN PROVIDES ADDITIONAL RETIREMENT INCOME BASED ON A PERCENTAGE OF BASE SALARY AND VESTS AT THREE AND FIVE YEARS OF SERVICE. MS. AYERS RECEIVED $105,481 FROM NONQUALIFIED SUPPLEMENTAL RETIREMENT PLANS IN 2013. SCHEDULE J, PART II CERTAIN SENIOR EXECUTIVES ARE ACCOUNTABLE FOR AND PERFORM SERVICES FOR SANTAFE HEALTHCARE, INC. AND EACH OF ITS AFFILIATES. SANTAFE HEALTHCARE, INC. AND AFFILIATES REPRESENT A DIVERSIFIED FAMILY OF NOT-FOR-PROFIT ORGANIZATIONS WITH $2 BILLION IN GROSS RECEIPTS AND APPROXIMATELY 2,000 EMPLOYEES. THESE SENIOR EXECUTIVES ARE PAID DIRECTLY BY EITHER SANTAFE HEALTHCARE, INC. OR AVMED, INC. AND THEIR COMPENSATION AND BENEFITS ARE APPORTIONED AND CHARGED TO THE RESPECTIVE AFFILIATE BASED ON THE ESTIMATED AMOUNT OF TIME SPENT ON EACH AFFILIATE'S ACTIVITIES. FOR 2013, THE FOLLOWING PERCENTAGES OF EACH EXECUTIVE'S COMPENSATION AND BENEFITS (FOR THOSE SENIOR EXECUTIVES PAID BY A RELATED ORGANIZATION) IS APPORTIONED AND CHARGED TO SANTAFE SENIOR LIVING, INC., AS FOLLOWS: 2% - MICHAEL P GALLAGHER, CHIEF EXECUTIVE OFFICER 10% - TROY R HART, PRESIDENT 2% - STEVEN M ZIEGLER, DIRECTOR 5% - CATHERINE E AYERS, SECRETARY 2% - RANDALL L. STUART, TREASURER FORM 990, PART VII, SECTION A, LINE 1A: COMPENSATION PAID BY RELATED ORGANIZATIONS: CERTAIN SENIOR EXECUTIVES ARE ACCOUNTABLE FOR AND PERFORM SERVICES FOR SANTAFE HEALTHCARE, INC. AND EACH OF ITS AFFILIATES. SANTAFE HEALTHCARE AND AFFILIATES REPRESENT A DIVERSIFIED FAMILY OF NOT-FOR-PROFIT ORGANIZATIONS WITH $2 BILLION IN GROSS RECEIPTS AND APPROXIMATELY 2,000 EMPLOYEES. THESE SENIOR EXECUTIVES ARE PAID DIRECTLY BY EITHER SANTAFE HEALTHCARE, INC. OR AVMED, INC. AND THEIR COMPENSATION AND BENEFITS ARE APPORTIONED AND CHARGED TO THE RESPECTIVE AFFILIATE BASED ON THE ESTIMATED AMOUNT OF TIME SPENT ON EACH AFFILIATE'S ACTIVITIES. FOR 2013, THE FOLLOWING PERCENTAGES OF EACH EXECUTIVE'S COMPENSATION AND BENEFITS (FOR THOSE SENIOR EXECUTIVES PAID BY A RELATED ORGANIZATION) IS APPORTIONED AND CHARGED TO SENIOR LIVING, AS FOLLOWS: 2% - MICHAEL P GALLAGHER, CHIEF EXECUTIVE OFFICER 10% - TROY R HART, PRESIDENT 2% - STEVEN M ZIEGLER, DIRECTOR 5% - CATHERINE E AYERS, SECRETARY 2% - RANDALL L. STUART, TREASURER FORM 990, PART VI, SECTION A, LINE 7A SANTAFE HEALTHCARE, INC. HAS RESERVED POWERS AS DELINEATED IN THE ARTICLES OF INCORPORATION AND BYLAWS THAT PERMITS IT TO ELECT ONE OR MORE MEMBERS OF THE GOVERNING BODY OF SANTAFE SENIOR LIVING, INC. FORM 990, PART VI, SECTION A, LINE 7B THE RESERVED POWERS OF SANTAFE HEALTHCARE, INC., AS DELINEATED IN THE ARTICLES OF INCORPORATION AND BYLAWS, PERMIT IT TO APPROVE OR RATIFY THE GOVERNING BODY'S DECISIONS RELATED TO BOARD MEMBER ELECTIONS OR REMOVALS, THE DECISION TO DISSOLVE THE ORGANIZATION AND OTHER MATTERS THAT MAY COME BEFORE THE BOARD OF DIRECTORS. FORM 990, PART VI, SECTION B, LINE 11 THE ORGANIZATION'S PROCESS FOR ENSURING THE ACCURATE PREPARATION, REVIEW AND APPROVAL OF THE 2013 FORM 990 BEGAN WITH PROFESSIONAL DEVELOPMENT OF STAFF (SEVERAL OF WHICH ARE CPAS) WHICH WERE INVOLVED IN THE PREPARATION OF THE 2013 FORM 990. IN ADDITION TO STAFF DEVELOPMENT, WHICH INCLUDED ATTENDING TAX SEMINARS AND CLASSES, MANAGEMENT ALSO CONSULTED WITH INDEPENDENT ACCOUNTING FIRMS AND TAX LEGAL COUNSEL REGARDING THE IRS FORM 990 CODE AND FILING REQUIREMENTS. THE ORGANIZATION ALSO PREVIOUSLY EDUCATED ITS MANAGEMENT TEAM, OFFICERS AND DIRECTORS, WITH THE ASSISTANCE OF DELOITTE TAX LLP, REGARDING THE FORM 990 AND THEIR INVOLVEMENT IN REVIEWING THE RETURN. FOLLOWING MANAGEMENT'S PREPARATION OF THE 2013 FORM 990, DELOITTE TAX LLP REVIEWED THE 2013 FORM 990. A COPY OF THE 2013 FORM 990 AND ATTACHMENTS WERE PROVIDED TO THE ORGANIZATION'S CURRENT BOARD OF DIRECTORS FOR THEIR REVIEW AND COMMENT. EXECUTIVE MANAGEMENT ADDRESSED ANY QUESTIONS RAISED BY THE BOARD MEMBERS PRIOR TO FILING THE 2013 FORM 990 AND ATTACHMENTS WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C SANTAFE SENIOR LIVING, INC. HAS A POLICY FOR MONITORING AND ENFORCING COMPLIANCE WITH ITS CONFLICT OF INTEREST POLICY. THE POLICY DETAILS THAT THE CORPORATE SECRETARY HAS RESPONSIBILITY FOR DELIVERY AND RECEIPT OF DIRECTOR AND OFFICER CONFLICT OF INTEREST STATEMENTS. ANNUAL CONFLICT OF INTEREST STATEMENTS ARE REVIEWED BY THE CORPORATE SECRETARY TO ENSURE RECORDS ARE COMPLETE. AS PART OF THE CORPORATE CONTRACT REVIEW PROCESS, CONSIDERATION IS GIVEN TO ANY POTENTIAL CONFLICTS OF INTEREST INVOLVING OPERATIONAL OR FINANCIAL TRANSACTIONS. ALL OFFICERS AND BOARD MEMBERS ARE EXPECTED TO NOTIFY THE CHAIRMAN OF THE BOARD IF A POTENTIAL CONFLICT EXISTS. IF A CASE IS DISCOVERED OR REPORTED, A REPORT TO CORPORATE COUNSEL AND/OR THE CHAIRMAN OF THE BOARD IS MADE AS TO THE FACTS AND CIRCUMSTANCES SURROUNDING THE INCIDENT. MEMORANDUMS (OR MINUTES) ARE MADE OF EVERY FINAL DECISION, INCLUDING THE REASONS THEREFORE AND THE ACTION TAKEN, WHETHER THE QUESTION IS DETERMINED TO BE SUBSTANTIAL OR NOT. A COPY OF SUCH MEMORANDUM (OR MINUTES) IS FILED WITH THE CORPORATE SECRETARY FOR EXAMINATION BY THE BOARD OF DIRECTORS. FORM 990, PART VI, SECTION B, LINE 15 LINE 15A: MICHAEL P GALLAGHER IS THE CHIEF EXECUTIVE OFFICER (CEO) OF SANTAFE SENIOR LIVING, INC. MR. GALLAGHER IS COMPENSATED BY SANTAFE HEALTHCARE, INC. (SANTAFE), A RELATED SUPPORTING ORGANIZATION. SANTAFE UTILIZES THE FOLLOWING PROCESS TO ESTABLISH THE CEO'S COMPENSATION AND BENEFITS: THE SANTAFE BOARD OF DIRECTORS ANNUALLY RETAINS AN INDEPENDENT THIRD PARTY COMPENSATION AND BENEFITS CONSULTING FIRM TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF THE CEO'S TOTAL DIRECT COMPENSATION (BASE SALARY, ANNUAL INCENTIVES AND LONG TERM INCENTIVES) AND BENEFITS. THE COMPETITIVE ANALYSIS INCLUDES COMPARISON TO SIMILAR POSITIONS IN COMPANIES OF SIMILAR SIZE WITHIN THE SAME OR SIMILAR INDUSTRY. THE INDEPENDENT CONSULTING FIRM MAKES RECOMMENDATIONS, IF ANY, DIRECTLY TO THE BOARD OF DIRECTORS. THE BOARD OF DIRECTORS ESTABLISHES THE FINAL COMPENSATION AND BENEFIT PACKAGE FOR THE CEO TAKING INTO CONSIDERATION THE MARKET COMPETITIVENESS REVIEW AND FINAL RECOMMENDATION OF THE INDEPENDENT CONSULTING FIRM. THE INDEPENDENT CONSULTING FIRM PROVIDES AN OPINION LETTER REGARDING THE REASONABLENESS OF THE FINAL COMPENSATION AND BENEFITS PACKAGE. THE ACTIONS OF THE BOARD ARE DOCUMENTED IN THE MINUTES OF THE BOARD MEETING. FORM 990, PART VI, SECTION B, LINE 15B: PROCESS FOR DETERMINING COMPENSATION FOR THE OFFICERS AND DIRECTORS OF SANTAFE SENIOR LIVING, INC. IS AS FOLLOWS: THE SANTAFE HEALTHCARE, INC. (SANTAFE) BOARD OF DIRECTORS ANNUALLY RETAINS AN INDEPENDENT THIRD PARTY COMPENSATION AND BENEFITS FIRM (FIRM) TO CONDUCT A MARKET COMPETITIVENESS REVIEW OF ALL OFFICERS AND DIRECTORS' TOTAL DIRECT COMPENSATION (BASE SALARY, ANNUAL INCENTIVES AND LONG-TERM INCENTIVES) AND BENEFITS. THE COMPETITIVE ANALYSIS INCLUDES COMPARISONS TO SIMILAR POSITIONS IN COMPANIES OF SIMILAR SIZE WITHIN THE SAME OR SIMILAR INDUSTRY. AFTER COMPLETION OF ITS REVIEW, THE FIRM MAKES RECOMMENDATIONS, IF ANY, DIRECTLY TO THE SANTAFE BOARD OF DIRECTORS. THE FIRM PROVIDES AN OPINION LETTER REGARDING THE REASONABLENESS OF CASH COMPENSATION AND EXECUTIVE BENEFITS. THE ACTIONS OF THE BOARD ARE DOCUMENTED IN THE MINUTES OF THE BOARD MEETING. FORM 990, PART VI, SECTION C, LINE 19 SANTAFE SENIOR LIVING'S PROCEDURE FOR MAKING VARIOUS DOCUMENTS AVAILABLE TO THE PUBLIC: SANTAFE SENIOR LIVING,INC. MAKES ITS GOVERNING DOCUMENTS AVAILABLE TO THE PUBLIC ON A CASE BY CASE BASIS IF REQUESTED DIRECTLY FROM THE ORGANIZATION. THE ARTICLES OF INCORPORATION CAN BE ACCESSED DIRECTLY THROUGH THE FLORIDA DEPARTMENT OF STATE, DIVISION OF CORPORATIONS WEBSITE AT WWW.SUNBIZ.ORG. THE CORPORATE CONFLICT OF INTEREST POLICY AND AUDITED COMBINED FINANCIAL STATEMENTS, WHICH INCLUDE SANTAFE SENIOR LIVING, CAN BE OBTAINED DIRECTLY FROM THE ORGANIZATION UPON WRITTEN REQUEST. FORM 990, PART XII, LINE 2C: THE COMPANY'S AUDIT COMMITTEE HAS NOT CHANGED ITS PROCESS FOR SELECTION OF THE INDEPENDENT ACCOUNTANT OR ITS PROCESS FOR MANAGING THE AUDIT. SANTAFE HEALTHCARE INC PO BOX 749 GAINESVILLE FL 326270749 592317607 MANAGEMENT AND FINANCIAL SUPPORT FOR NOT-FOR-PROFIT AFFILIATES FL 501(C)(3) 11B TYPE II N/A 0 NORTH FLORIDA RETIREMENT VILLAGE INC PO BOX 749 GAINESVILLE FL 326270749 591912330 RETIREMENT COMMUNITY FL 501(C)(3) 9 SANTAFE HEALTHCARE INC 0 NORTH CENTRAL FLORIDA HOSPICE INC PO BOX 749 GAINESVILLE FL 326270749 592490893 HOSPICE CARE FL 501(C)(3) 9 SANTAFE HEALTHCARE INC 0 BVG ACQUISITION INC PO BOX 749 GAINESVILLE FL 326270749 203701186 RETIREMENT COMMUNITY FL 501(C)(3) 9 SANTAFE SENIOR LIVING INC 1 EAST RIDGE RETIREMENT VILLAGE INC PO BOX 749 GAINESVILLE FL 326270749 590903331 RETIREMENT COMMUNITY FL 501(C)(3) 9 SANTAFE SENIOR LIVING INC 1 AVMED INC PO BOX 749 GAINESVILLE FL 326270749 592742907 HEALTH CARE FL 501(C)(4) N/A SANTAFE HEALTHCARE INC 0 BONITA SPRINGS RETIREMENT VILLAGE INC PO BOX 749 GAINESVILLE FL 326270749 262386152 RETIREMENT COMMUNITY FL 501(C)(3) 9 SANTAFE SENIOR LIVING INC 1 SANTAFE SENIOR LIVING FOUNDATION INC PO BOX 749 GAINESVILLE FL 326270749 264464727 CHARITABLE AND EDUCATIONAL PURPOSES FL 501(C)(3) 7 SANTAFE SENIOR LIVING INC 1 SF HOLDING CORPINC & SUBSIDIARY PO BOX 749 GAINESVILLE FL 326270749 592903901 HOLDING COMPANY FL N/A C 0 0 1 1 1 0 0 0 0 0 0 1 1 1 0 0 1 1 1 0 BVG ACQUISITION INC B 3648575 FAIR VALUE BVG ACQUISITION INC C 8880000 FAIR MARKET VALUE BVG ACQUISITION INC D 6698700 HIGHEST LOAN BALANCE DURING 2013 BONITA SPRINGS RETIREMENT VILLAGE INC D 7328632 LOAN BALANCE AS OF 12/31/2013 EAST RIDGE RETIREMENT VILLAGE INC L 121203 FAIR VALUE BONITA SPRINGS RETIREMENT VILLAGE INC L 646114 FAIR VALUE BONITA SPRINGS RETIREMENT VILLAGE INC Q 432140 FAIR VALUE BVG ACQUISITION INC Q 56265 FAIR VALUE EAST RIDGE RETIREMENT VILLAGE INC R 151611 ACTUAL INVOICES PAID