2012-11-15T10:59:37-06:00 2011-12-31 861065772 DELOITTE TAX LLP 655 WEST BROADWAY SUITE 700 SAN DIEGO CA 921018590 990 2011-01-01 953826037 SCAN GROUP SCAN 5629895100 3800 KILROY AIRPORT WAY NO 100 LONG BEACH CA 90806 CHRIS WING 5629895100 2012-11-15 1 DIANA J MCCUTCHEN P00545657 6192326500 2011 2016-02-24 21:20:13Z CHRIS WING 3800 KILROY AIRPORT WAY NO 100 LONG BEACH CA 90806 5770189 0 X N/A X 1983 CA TO SUPPORT THE CHARITABLE MISSION OF SCAN HEALTH PLAN AND ITS AFFILIATES. 9 7 233 0 0 0 0 0 0 0 759387 132963 0 0 759387 132963 0 0 0 0 22419777 22957805 0 0 0 0 -22631301 22419777 326504 -21660390 -193541 20311436 22095162 8152824 10201061 12158612 11894101 TO SUPPORT THE CHARITABLE MISSION OF SCAN HEALTH PLAN AND ITS AFFILIATES. 0 0 41169 SCAN GROUP IS A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION WHICH IS A SUPPORTING ORGANIZATION TO A RELATED SECTION 501(C)(3) TAX EXEMPT ORGANIZATION, SCAN HEALTH PLAN, AND ALSO WITH RESPECT TO THE SECTION 501(C)(3) ACTIVITIES OF TWO RELATED ARIZONA NONPROFIT CORPORATIONS EXEMPT UNDER SECTION 501(C)(4), SCAN HEALTH PLAN ARIZONA AND SCAN LONG TERM CARE. SCAN GROUP SUPPORTS SCAN HEALTH PLAN, SCAN HEALTH PLAN ARIZONA AND SCAN LONG TERM CARE IN ACTIVITIES THAT SUPPORT THE GOAL OF SCAN HEALTH PLAN TO KEEP SENIORS HEALTHY, INDEPENDENT AND AT HOME. THESE ACTIVITIES INCLUDE RESEARCH STUDIES RELATED TO THE NEEDS OF FRAIL SENIORS. SCAN GROUP ALSO PROVIDES SUPPORT SERVICES TO THE SCAN FOUNDATION, A 501(C)(3) TAX EXEMPT ORGANIZATION. 41169 1 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 0 1 0 0 233 1 0 0 0 0 0 0 0 0 0 0 0 0 X 9 7 0 0 1 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 CA X VIRGINIA HAVAI 5629895100 3800 KILROY AIRPORT WAY LONG BEACH CA 90806 X COLLEEN CAIN 1.40 X X 0 166670 0 THOMAS HIGGINS 1.10 X 0 138308 0 KIM HUNTER 1.10 X 0 106347 0 PATRICK SEAVER 1.10 X 0 111587 0 THOMAS MCDANIEL 1.20 X 0 125300 0 MICHAEL NOEL 1.10 X 0 92550 0 ANDREW ALLOCCO 1.30 X 0 53875 0 CHRIS WING 40.00 X X 0 305810 20849 RYAN TRIMBLE 40.00 X X 0 921522 10976 DOUGLAS JAQUES 40.00 X 416260 0 79903 RANDY STONE 40.00 X 0 226899 15107 WILLIAM ROTH 40.00 X 0 301980 330 TIMOTHY SCHWAB 40.00 X 0 859139 94364 DENNIS EDER 40.00 X 0 1322329 31361 MERLIN SWACKHAMMER 40.00 X 458298 0 42560 SHERRY STANISLAW 40.00 X 0 329332 43390 REBECCA LEARNER 40.00 X 299150 0 40739 ELIZABETH RUSSELL 40.00 X 0 487331 81495 PETER BEGANS 40.00 X 367272 0 71099 GILBERT MILLER 40.00 X 0 257055 486 ROGER LAPP 40.00 X 0 576057 36339 MARC RADNER 40.00 X 720739 0 26614 HENRY W OSOWSKI 40.00 X 746702 0 25819 DEBORAH MILLER 40.00 X 0 330333 38179 LISA DAVIS 40.00 X 233030 0 27398 KWAN-LEUNG MOON 40.00 X 318038 0 28463 ALAN LITTLE 40.00 X 275889 0 19737 CHRISTOPHER ZORN 40.00 X 233486 0 34619 ARTHUR HENKEL 40.00 X 274641 0 18588 4343505 6712424 788415 52 0 1 0 0 276278 276278 5493911 5637226 -143315 -143315 -143315 132963 0 0 132963 4618281 4618281 13482381 1197340 12285041 1164537 115975 1048562 2417574 194994 2222580 1275032 101052 1173980 130570 130570 288250 288250 57500 57500 61866 61866 9078397 15273 9063124 59664 59664 3060837 15957 3044880 3988120 3988120 5440484 1350 5439134 459096 27617 431479 74600 8034 66566 363794 363794 FIXED ASSETS USAGE FEE 1147722 93629 1054093 MEDICAL REVIEW 1124386 1124386 LICENSE, DUES AND SUBSC 442294 166030 276264 ALLOCATIONS TO OTHER SC -48408881 -1896082 -46512799 326504 41169 285335 0 -17305 -6882 6365893 13390649 356316 1319018 2127147 2253157 9383808 3711349 2095577 1427871 20311436 22095162 4625887 6842519 3526937 3358542 8152824 10201061 X 12158612 11894101 12158612 11894101 20311436 22095162 X -193541 -70970 X 0 1 1 X 0 X X X 0 0 0 SCAN HEALTH PLAN 953858259 9 1 1 1 0 1 0 0 EXECUTIVE BENEFIT TRUST 1427871 1427871 DEFERRED COMPENSATION 1427871 DEFERRED RENT 1930671 3358542 132963 326504 -193541 -70970 -70970 -264511 127 -70970 -61866 -132836 132963 0 132963 264638 0 264638 61866 61866 326504 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: FIN 48 (ASC 70) WAS ADOPTED BY THE ORGANIZATION DURING THE YEAR ENDED DECEMBER 31, 2009. THERE HAS BEEN NO LIABILITY FOR UNCERTAIN TAX POSITIONS RECORDED ON THE FINANCIAL STATEMENTS FOR THE CURRENT YEAR. PART XII, LINE 2D - OTHER ADJUSTMENTS: INVESTMENT MANAGEMENT FEE -61,866. PART XIII, LINE 4B - OTHER ADJUSTMENTS: INVESTMENT MANAGEMENT FEE 61,866. X X X X X X 1 1 1 0 0 0 0 1 0 COLLEEN CAIN 0 136670 0 30000 0 0 0 0 0 0 0 166670 0 0 CHRIS WING 0 288493 0 0 0 17317 0 12577 0 8272 0 326659 0 0 RYAN TRIMBLE 0 566191 0 350000 0 5331 0 0 0 10976 0 932498 0 0 DOUGLAS JAQUES 292404 0 105783 0 18073 0 42184 0 37719 0 496163 0 0 0 RANDY STONE 0 207618 0 0 0 19281 0 2334 0 12773 0 242006 0 0 WILLIAM ROTH 0 119712 0 0 0 182268 0 0 0 330 0 302310 0 0 TIMOTHY SCHWAB 0 658554 0 132915 0 67670 0 91201 0 3163 0 953503 0 45628 DENNIS EDER 0 141030 0 102983 0 1078316 0 19682 0 11679 0 1353690 0 228326 MERLIN SWACKHAMMER 306605 0 95133 0 56560 0 40824 0 1736 0 500858 0 0 0 SHERRY STANISLAW 0 233004 0 77655 0 18673 0 31971 0 11419 0 372722 0 0 REBECCA LEARNER 222074 0 59855 0 17221 0 24672 0 16067 0 339889 0 0 0 ELIZABETH RUSSELL 0 315649 0 150000 0 21682 0 52323 0 29172 0 568826 0 0 PETER BEGANS 284728 0 63220 0 19324 0 34134 0 36965 0 438371 0 0 0 GILBERT MILLER 0 80739 0 0 0 176316 0 0 0 486 0 257541 0 0 ROGER LAPP 0 198909 0 62294 0 314854 0 29608 0 6731 0 612396 0 9751 MARC RADNER 171172 0 67576 0 481991 0 19148 0 7466 0 747353 0 90366 0 HENRY W OSOWSKI 94149 0 55053 0 597500 0 17150 0 8669 0 772521 0 7394 0 DEBORAH MILLER 0 211730 0 85893 0 32710 0 28250 0 9929 0 368512 0 0 LISA DAVIS 176322 0 39777 0 16931 0 16033 0 11365 0 260428 0 0 0 KWAN-LEUNG MOON 250811 0 50793 0 16434 0 17150 0 11313 0 346501 0 0 0 ALAN LITTLE 51372 0 32558 0 191959 0 16175 0 3562 0 295626 0 0 0 CHRISTOPHER ZORN 175291 0 45967 0 12228 0 16324 0 18295 0 268105 0 0 0 ARTHUR HENKEL 214001 0 41989 0 18651 0 17150 0 1438 0 293229 0 0 0 PART I, LINES 4A-C PART I, LINES 4A-C: PART I, LINE 4A: DURING 2011, THE EMPLOYMENT RELATIONSHIPS OF THE FOLLOWING EMPLOYEES OF SCAN HEALTH PLAN AND SCAN GROUP WERE ENDED. IN CONNECTION WITH THE TERMINATION OF THEIR EMPLOYMENTS, SCAN HEALTH PLAN NEGOTIATED AND PAID SEVERANCE TO EACH OF THEM. THE SEVERANCE PAYMENT WAS IN ACCORDANCE WITH THE TERMS OF EACH HIGHEST COMPENSATED EMPLOYEE'S, KEY EMPLOYEE'S AND AN OFFICER'S THEN EXISTING EMPLOYMENT AGREEMENT. ROGER LAPP, SVP MEMBERSHIP, KEY EMPLOYEE - SCAN HEALTH PLAN, $256,963 MARC RADNER, SVP HUMAN RESOURCES, KEY EMPLOYEE - SCAN GROUP, $331,239 HENRY OSOWSKI, SVP BUSINESS DEVELOPMENT, KEY EMPLOYEE - SCAN GROUP, $525,078 DENNIS EDER, CHIEF FINANCIAL OFFICER, OFFICER - SCAN HEALTH PLAN, $773,525 ALAN LITTLE, BUSINESS DEVELOPMENT EXECUTIVE, HIGHLY COMPENSATED EMPLOYEE - SCAN GROUP, $148,104 PART I, LINE 4B: THE COMPANY PROVIDES A SUPPLEMENTAL NON-QUALIFIED RETIREMENT PLAN TO ONLY SENIOR EXECUTIVES OF THE COMPANY. SENIOR V.P. AND OFFICERS ARE ELIGIBLE TO PARTICIPATE IN THE SECTION 457(F) PLAN. THE FOLLOWING INDIVIDUALS PARTICIPATED IN THE COMPANY'S SECTION 457(F) DURING THE YEAR 2011: CHRISTOPHER WING, RANDY STONE, PETER BEGANS, DENNIS EDER, TIMOTHY SCHWAB, DOUGLAS JAQUES, MARC RADNER, SHERRY STANISLAW, ROGER LAPP, HENRY OSOWSKI, DEBORAH MILLER, MERLIN SWACKHAMMER, REBECCA LEARNER AND ELIZABETH RUSSELL. COMPENSATION PURSUANT TO THE TERMS AND CONDITIONS OF THE SECTION 457(F) PLAN, A PARTICIPANT BECOMES 100% VESTED IN THE EMPLOYER CONTRIBUTION UPON THE OCCURRENCE OF ANY OF THE FOLLOWING WHILE THE PARTICIPANT IS AN EMPLOYEE. (I) THE PARTICIPANT HAS TEN YEARS OF CONTINUOUS EMPLOYMENT, COUNTING ONLY SERVICE AFTER DECEMBER 31, 2005; (II) THE PARTICIPANT REACHES THE AGE OF 62 AND HAS FIVE YEARS OF CONTINUOUS EMPLOYMENT; (III) THE PARTICIPANT'S INVOLUNTARY TERMINATION; (IV) THE PARTICIPANT'S DISABILITY; OR (V) THE PARTICIPANT'S DEATH THERE WERE 5 INDIVIDUALS WHO RECEIVED PAYMENTS OUT OF THE SECTION 457(F) PLAN DURING THE YEAR: (1) TIMOTHY SCHWAB, $45,628, (2) DENIS EDER, $228,326, (3) HENRY OSOWSKI, $7,394, (4) MARC RADNER, $90,366, AND (5) ROGER LAPP $9,751 PART I, LINE 4C: THE FOLLOWING INDIVIDUALS PARTICIPATED IN SCAN HEALTH PLAN'S KEYSOP PLAN DURING THE TAXABLE YEAR: TIMOTHY SCHWAB AND REBECCA LEARNER. THE PLAN IS NOW FROZEN AND NO EMPLOYEES ARE BEING NEWLY ADDED AS PARTICIPANTS. PART I, LINE 7 IN 2011, COLLEEN CAIN WAS AWARDED AND RECEIVED A $30,000 BONUS FOR HER EXTRAORDINARY EFFORTS PERFORMED IN 2010 WITH RESPECT TO HER ROLE AS BOTH SCAN GROUP AND SCAN HEALTH PLAN BOARD CHAIRPERSON AND HER INVOLVEMENT ON MULTIPLE BOARD COMMITTEES. THE BONUS WAS REVIEWED AND RECOMMENDED BY THE COMPENSATION COMMITTEE AND APPROVED BY THE BOARD. MS. CAIN RECUSED HERSELF FROM THE DISCUSSION AND ABSTAINED FROM THE VOTE. OUTSIDE INDEPENDENT COMPENSATION CONSULTANTS REVIEWED AND DETERMINED, THAT WHEN INCLUDED WITH PREVIOUSLY AUTHORIZED COMPENSATION, THE AMOUNT REPRESENTED REASONABLE COMPENSATION FOR MS. CAIN'S SERVICES DURING 2010. THE PROCESS FOR DETERMINING THE COMPENSATION OF THE INDEPENDENT DIRECTORS OF SCAN GROUP AND ITS AFFILIATES IS IN ACCORDANCE WITH SCAN GROUP'S "INDEPENDENT DIRECTORS' COMPENSATION PHILOSOPHY" AND IS SIMILAR TO THE COMPENSATION PROCESS EMPLOYED BY SCAN GROUP WITH RESPECT TO THE SENIOR EXECUTIVES OF SCAN GROUP AND SCAN HEALTH PLAN. ELEMENTS OF COMPENSATION INCLUDE AN ANNUAL RETAINER FOR BOARD MEMBERS AND COMMITTEE CHAIRS, AS WELL AS ESTABLISHED PER MEETING FEES. IN DETERMINING SUCH COMPENSATION, THE BOARD AND COMPENSATION COMMITTEE RELY UPON THE COUNSEL AND EXPERTISE OF ERNST & YOUNG, AN INDEPENDENT CONSULTANT, WITH WELL-ESTABLISHED EXPERIENCE AND EXPERTISE IN THE AREA OF NONPROFIT ORGANIZATION COMPENSATION AND COMPLIANCE WITH THE INTERMEDIATE SANCTIONS REQUIREMENTS APPLICABLE TO SUCH COMPENSATION. THE COMPENSATION COMMITTEE RETAINS ERNST & YOUNG TO CONDUCT A STUDY OF INDEPENDENT DIRECTOR COMPENSATION PRACTICES BIENNIALLY, INCLUDING BENCHMARK DATA AND A REASONABLENESS OPINION. PART I, LINE 8 CERTAIN AMOUNTS REPORTED IN FORM 990, PART VII, REPRESENT FIXED PAYMENTS UNDER INITIAL CONTRACTS AND ARE THEREFORE EXEMPT FROM THE APPLICATION OF IRC SECTION 4958. FORM 990, PART VI, SECTION A, LINE 4 THE FOLLOWING AMENDMENTS WERE MADE TO THE BYLAWS OF THE ORGANIZATION: 1. MAINTAIN SEPARATE BOARD COMMITTEES FOR SCAN GROUP AND THE SCAN FOUNDATION 2. MADE THE SCAN GROUP CEO A VOTING MEMBER OF THE FINANCE AND CORPORATE GOVERNANCE COMMITTEES 3. CREATED A VICE-CHAIRMAN POSITION WITH RESPECT TO THE AUDIT COMMITTEE FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 IS PREPARED BY DELOITTE TAX LLP, WORKING IN CONJUNCTION WITH SCAN'S FINANCE DEPARTMENT. SCAN HEALTH PLAN'S DIRECTOR OF ACCOUNTING HAS DIRECT RESPONSIBILITY FOR THIS EFFORT, SUBJECT TO SUPERVISION BY THE SCAN HEALTH PLAN CONTROLLER. AFTER AN INITIAL DRAFT OF THE FORM 990 IS PREPARED, IT IS CIRCULATED FOR REVIEW AND COMMENT BY RELEVANT MEMBERS OF THE EXECUTIVE TEAM WHO HAVE RESPONSIBILITY AND/OR KNOWLEDGE ABOUT THE VARIOUS MATTERS DISCLOSED AND/OR DESCRIBED IN THE FORM. THE GENERAL COUNSEL, IN PARTICULAR, REVIEWS THE FORM 990 AND ENSURES ACCURACY OF DESCRIPTIONS AND THAT DISCLOSURE IS COMPLETE. THE DRAFT FORM 990 IS REVIEWED BY THE AUDIT AND COMPLIANCE COMMITTEE OF THE BOARD OF DIRECTORS OF SCAN GROUP, AND IS SHARED WITH ALL MEMBERS OF THE BOARD OF DIRECTORS AFTER IT IS READY FOR FILING BUT BEFORE IT IS FILED. FORM 990, PART VI, SECTION B, LINE 12C SCAN GROUP REGULARLY AND CONSISTENTLY MONITORS AND ENFORCES COMPLIANCE WITH ITS CONFLICT OF INTEREST POLICY THROUGH ANNUAL CIRCULATION OF A CONFLICT OF INTEREST QUESTIONNAIRE WHICH IS REQUIRED TO BE ANSWERED BY ALL MEMBERS OF THE BOARD OF DIRECTORS, OFFICERS AND MEMBERS OF EXECUTIVE MANAGEMENT. IN ADDITION, THERE IS REGULAR EDUCATION AND ENFORCEMENT THROUGH OVERSIGHT OF SUCH POLICY AND THE SCAN HEALTH PLAN GIFT AND BUSINESS COURTESIES POLICY WITH RESPECT TO EACH DEPARTMENT BY MEMBERS OF THE SENIOR EXECUTIVE TEAM WITH RESPONSIBILITY FOR SUCH DEPARTMENT. THE LEGAL DEPARTMENT OF SCAN GROUP REVIEWS ALL CONTRACTUAL RELATIONSHIPS ENTERED INTO BY THE ORGANIZATION AND THE GENERAL COUNSEL OF SCAN GROUP IS RESPONSIBLE FOR MONITORING CONFLICTS OF INTEREST THROUGH THE ANNUAL CIRCULATION AND REVIEW OF THE CONFLICT OF INTEREST QUESTIONNAIRE. ACCORDINGLY, THE LEGAL DEPARTMENT OF SCAN GROUP THROUGH THE GENERAL COUNSEL IS IN A POSITION TO MONITOR AND ENFORCE COMPLIANCE WITH THE POLICY ON AN ONGOING BASIS. FORM 990, PART VI, SECTION B, LINE 15 15 A) THE PROCESS FOR DETERMINING THE COMPENSATION OF THE CHIEF EXECUTIVE OFFICER OF SCAN GROUP IS CONDUCTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF SCAN GROUP, ALL OF THE VOTING MEMBERS OF WHICH ARE INDEPENDENT PERSONS. IN DETERMINING THE CHIEF EXECUTIVE OFFICER'S COMPENSATION, THE COMPENSATION COMMITTEE WORKS WITH AND RELIES UPON THE COUNSEL AND EXPERTISE OF ERNST & YOUNG, A CONSULTANT WITH WELL-ESTABLISHED EXPERIENCE AND EXPERTISE IN THE AREA OF NONPROFIT ORGANIZATION EXECUTIVE COMPENSATION AND COMPLIANCE WITH THE INTERMEDIATE SANCTIONS REQUIREMENTS APPLICABLE TO SUCH COMPENSATION. ERNST & YOUNG PROVIDES AN "EXECUTIVE COMPENSATION REPORT" TO THE COMPENSATION COMMITTEE EACH YEAR WHICH FURNISHES THE BASIS FOR THE ESTABLISHMENT OF THE CHIEF EXECUTIVE OFFICER'S COMPENSATION PACKAGE DURING THE FOLLOWING YEAR. THE ERNST & YOUNG EXECUTIVE COMPENSATION REPORT IS BASED ON A REVIEW OF THE EXECUTIVE COMPENSATION PRACTICES OF A VARIETY OF ORGANIZATIONS THAT ARE CONSIDERED COMPARABLE TO SCAN GROUP BASED ON VARIOUS METRICS. THE COMPENSATION COMMITTEE DELIBERATES ON THE ISSUE OF THE CHIEF EXECUTIVE OFFICER'S COMPENSATION PACKAGE IN LIGHT OF THE ERNST & YOUNG EXECUTIVE COMPENSATION REPORT AND QUESTIONS ARE ASKED OF, AND ANSWERED BY ERNST & YOUNG, REGARDING SUCH REPORT AND OTHER MATTERS RELEVANT TO SUCH PACKAGE. BASED ON SUCH DELIBERATIONS, THE COMPENSATION COMMITTEE MAKES A RECOMMENDATION TO THE BOARD OF DIRECTORS OF SCAN GROUP REGARDING THE COMPENSATION PACKAGE FOR THE FOLLOWING YEAR. THE FULL BOARD OF DIRECTORS OF SCAN GROUP DELIBERATES ON AND THEN VOTES ON SUCH RECOMMENDATION; THE CHIEF EXECUTIVE OFFICER IS RECUSED FOR THE ENTIRETY OF SUCH DELIBERATIONS AND VOTE. THE MINUTES OF THE COMPENSATION COMMITTEE AND THE BOARD OF DIRECTORS FOR THESE MEETINGS ARE PREPARED SUBSTANTIALLY CONTEMPORANEOUSLY AND SUBSTANTIATE SUCH DELIBERATIONS AND DECISIONS. 15 B) THE PROCESS FOR DETERMINING THE COMPENSATION OF OFFICERS OR OTHER KEY EMPLOYEES OF SCAN GROUP IS CONDUCTED BY THE HUMAN RESOURCES DEPARTMENT AND CHIEF EXECUTIVE OFFICER OF SCAN GROUP, AND THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF SCAN GROUP; ALL OF THE VOTING MEMBERS OF SUCH COMMITTEE ARE INDEPENDENT PERSONS. IN DETERMINING SUCH EMPLOYEE'S COMPENSATION, THE HUMAN RESOURCES DEPARTMENT AND COMPENSATION COMMITTEE WORKS WITH AND RELIES UPON THE COUNSEL AND EXPERTISE OF ERNST & YOUNG, A CONSULTANT WITH WELL-ESTABLISHED EXPERIENCE AND EXPERTISE IN THE AREA OF NONPROFIT ORGANIZATION EXECUTIVE COMPENSATION AND COMPLIANCE WITH THE INTERMEDIATE SANCTIONS REQUIREMENTS APPLICABLE TO SUCH COMPENSATION. ERNST & YOUNG PROVIDES AN "EXECUTIVE COMPENSATION REPORT" TO THE HUMAN RESOURCES DEPARTMENT AND COMPENSATION COMMITTEE EACH YEAR WHICH FURNISHES THE BASIS FOR THE ESTABLISHMENT OF SUCH EMPLOYEES' COMPENSATION PACKAGE DURING THE FOLLOWING YEAR. THE ERNST & YOUNG EXECUTIVE COMPENSATION REPORT IS BASED ON A REVIEW OF THE EXECUTIVE COMPENSATION PRACTICES OF A VARIETY OF ORGANIZATIONS THAT ARE CONSIDERED COMPARABLE TO SCAN GROUP BASED ON VARIOUS METRICS. THE CHIEF EXECUTIVE OFFICER MAKES A RECOMMENDATION TO THE COMPENSATION COMMITTEE WITH RESPECT TO EACH OF SUCH EMPLOYEES' COMPENSATION PACKAGE IN LIGHT OF THE ERNST & YOUNG EXECUTIVE COMPENSATION REPORT. AT THE COMPENSATION COMMITTEE MEETING ADDRESSING SUCH MATTERS, QUESTIONS ARE ASKED OF, AND ANSWERED BY ERNST & YOUNG, REGARDING SUCH REPORT AND OTHER MATTERS RELEVANT TO SUCH PACKAGE. BASED ON SUCH DELIBERATIONS, THE COMPENSATION COMMITTEE MAKES A DECISION REGARDING THE COMPENSATION PACKAGE FOR SUCH EMPLOYEES FOR THE FOLLOWING YEAR. THE MINUTES OF THE COMPENSATION COMMITTEE FOR THIS MEETING ARE PREPARED SUBSTANTIALLY CONTEMPORANEOUSLY AND SUBSTANTIATE SUCH DELIBERATIONS AND DECISIONS. FORM 990, PART VI, SECTION C, LINE 19 SCAN GROUP'S GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY ARE NOT MADE AVAILABLE TO THE PUBLIC. SCAN GROUP MAKES ITS FORM 990 AVAILABLE FOR PUBLIC INSPECTION, WHICH CONTAINS FINANCIAL INFORMATION. FORM 990, PART VII: RYAN TRIMBLE HAS SERVED AS A MEMBER OF THE BOARD OF DIRECTORS SINCE 2004 AND SERVED AS THE INTERIM CEO FOR THE ORGANIZATION FROM NOVEMBER 2010 THROUGH JULY 2011. AS SUCH, HE WAS NO LONGER AN INDEPENDENT MEMBER OF THE BOARD, BUT CONTINUED AS A MEMBER OF THE BOARD EX OFFICIO. UPON THE HIRING OF CHRIS WING AS PERMANENT CEO, MR. TRIMBLE FILLED, ON AN INTERIM BASIS, THE NEWLY CREATED ROLE OF CHIEF RISK OFFICER PENDING THE HIRING OF A PERMANENT CHIEF RISK OFFICER FOR THE COMPANY. AT THIS TIME, MR. TRIMBLE REASSUMED HIS POSITION AS A BOARD MEMBER, HOWEVER, GIVEN HIS CONTINUING POSITION AS AN EMPLOYEE OF THE COMPANY, HE DID NOT RECEIVE ANY SEPARATE COMPENSATION AS A BOARD MEMBER FOR ANY OF THE SCAN RELATED ENTITIES THROUGH THE END OF 2011, AT WHICH TIME HIS STATUS AS AN EMPLOYEE OF THE COMPANY ENDED. AVG HOURS DEVOTED TO RELATED ORG(S) WHEN RELATED COMP IS REPORTED: PART VII, SECTION A, COLUMN D REPORTS COMPENSATION PAID BY SCAN GROUP FOR SERVICES PROVIDED TO SCAN GROUP AND AFFILIATES. COLUMN B INCLUDES TOTAL HOURS FOR SCAN GROUP ONLY. BELOW IS A BREAKDOWN OF TOTAL HOURS SPENT. THE FOLLOWING OFFICERS, KEY EMPLOYEES, AND BOARD MEMBERS OF SCAN GROUP ALSO DEVOTE THE FOLLOWING TIME TO THE SCAN FOUNDATION: COLLEEN CAIN - 2.0 HOURS PER WEEK RYAN TRIMBLE - 1.0 HOURS PER WEEK PATRICK SEAVER - 1.9 HOURS PER WEEK THOMAS MCDANIEL - 2.1 HOURS PER WEEK THOMAS HIGGINS - 3.0 HOURS PER WEEK CHRIS WING - 1.0 HOURS PER WEEK DOUGLAS JAQUES - 2.0 HOURS PER WEEK DENNIS EDER - 2.0 HOURS PER WEEK RANDY STONE - 2.0 HOURS PER WEEK THE BOARD MEMBERS OF SCAN GROUP ALSO DEVOTE THE FOLLOWING TIME TO SCAN HEALTH PLAN: COLLEEN CAIN - 12.6 HOURS PER WEEK MICHAEL NOEL - 9.9 HOURS PER WEEK KIM HUNTER - 9.9 HOURS PER WEEK PATRICK SEAVER - 10.0 HOURS PER WEEK THOMAS MCDANIEL - 10.7 HOURS PER WEEK THOMAS HIGGINS - 9.9 HOURS PER WEEK ANDREW ALLOCCO - 11.7 HOURS PER WEEK SCAN HEALTH PLAN AND SCAN GROUP ARE OPERATED JOINTLY. THEREFORE, THE FOLLOWING INDIVIDUALS SPEND AN AVERAGE OF 40 HOURS PER WEEK BETWEEN THE TWO ORGANIZATIONS: DENNIS EDER CHRIS WING TIMOTHY SCHWAB DOUGLAS JAQUES MARC RADNER SHERRY STANISLAW ROGER LAPP HENRY W. OSOWSKI DEBORAH MILLER MERLIN SWACKHAMMER REBECCA LEARNER ELIZABETH RUSSELL PETER BEGANS RANDY STONE WILLIAM ROTH GILBERT MILLER RYAN TRIMBLE THE FOLLOWING OFFICERS, KEY EMPLOYEES, AND BOARD MEMBERS OF SCAN GROUP ALSO DEVOTE THE FOLLOWING TIME TO ONE OR BOTH OF SCAN HEALTH PLAN ARIZONA AND SCAN LONG TERM CARE: DENNIS EDER - 0.4 HOURS PER WEEK DOUGLAS JAQUES - 5.0 HOURS PER WEEK RYAN TRIMBLE - 0.4 HOURS PER WEEK ELIZABETH RUSSELL - 5.0 HOURS PER WEEK RANDY STONE - 5.0 HOURS PER WEEK REBECCA LEARNER - 5.0 HOURS PER WEEK CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET UNREALIZED LOSSES ON INVESTMENTS: -70,970. SCAN HEALTH PLAN 3800 KILROY AIRPORT WAY SUITE 100 LONG BEACH CA 90806 953858259 MEDICARE ADVANTAGE CA 501(C)(3) LINE 9 SCAN GROUP 1 THE SCAN FOUNDATION 3800 KILROY AIRPORT WAY SUITE 100 LONG BEACH CA 90806 450552845 GRANT MAKING CA 501(C)(3) LINE 11, TYPE II SCAN HEALTH PLAN 1 SCAN HEALTH PLAN ARIZONA 3800 KILROY AIRPORT WAY SUITE 100 LONG BEACH CA 90806 731729007 MEDICARE ADVANTAGE AZ 501(C)(4) SCAN GROUP 1 SCAN LONG TERM CARE 3800 KILROY AIRPORT WAY SUITE 100 LONG BEACH CA 90806 204607594 MEDICAID MANAGEMENT CARE AZ 501(C)(4) SCAN HEALTH PLAN ARIZONA 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 SCAN HEALTH PLAN P 49391850 SEE PART VII SCAN HEALTH PLAN ARIZONA P 2394294 SEE PART VII SCAN LONG TERM CARE P 878878 SEE PART VII THE SCAN FOUNDATION P 389897 SEE PART VII SCHEDULE R, PART V THE PERCENTAGE OF ALLOCATION TO AFFILIATED COMPANIES IS DETERMINED BASED ON ESTIMATED PERCENTAGE OF TIME WORKED, PERCENTAGE OF HEADCOUNTS, AND THE PERCENTAGE OF SCAN MEMBERSHIP, AS APPROPRIATE BASED ON THE NATURE OF THE EXPENSE.