2012-11-13T14:45:52-06:00 2012-06-30 470746749 CLIFTONLARSONALLEN LLP 600 WASHINGTON AVENUE SUITE 1800 ST LOUIS MO 63101 990 2011-07-01 362167948 WASHINGTON AND JANE SMITH COMMUNITY - BEVERLY WASH 7734747300 2320 WEST 113TH PLACE CHICAGO IL 60643 RAY MARNERIS CFO 7734747350 2012-11-12 1 CHAD KUNZE P00639380 3149254300 2011 2016-02-24 21:20:13Z SMITH VILLAGE KEVIN MCGEE 2320 WEST 113TH PLACE CHICAGO IL 60643 19489633 0 X WWW.SMITHVILLAGE.ORG X 1926 IL THE MISSION OF SMITH VILLAGE IS TO ENRICH THE LIVES OF SENIOR ADULTS. (SEE SCHEDULE O) THROUGH THE OPERATION OF A CONTINUING CARE RETIREMENT COMMUNITY OFFERING THE HIGHEST QUALITY OF SERVICES. 9 9 295 237 0 0 711632 579840 17566248 17962469 174050 498014 127181 126944 18579111 19167267 505625 400611 0 0 6117933 6005065 0 0 0 12677433 13196507 19300991 19602183 -721880 -434916 71848674 72134138 70563513 71349697 1285161 784441 X SMITH VILLAGE WAS INCORPORATED FOR THE CHARITABLE PURPOSE OF PROVIDING INDEPENDENT LIVING, ASSISTED LIVING, AND NURSING CARE SERVICES TO MEN AND WOMEN THROUGH THE OPERATION OF A CONTINUING CARE RETIREMENT COMMUNITY. (SEE SCHEDULE O) LOCATED IN BEVERLY, ILLINOIS. WITHIN THE COMMUNITY, SMITH VILLAGE OPERATES A 152 INDEPENDENT LIVING UNITS, 82 BED ASSISTED LIVING, 39 BED SKILLED MEMORY SUPPORT, AND 61 BED SKILLED NURSING FACILITY LICENSED BY THE ILLINOIS DEPARTMENT OF PUBLIC HEALTH (IDPH). ALL 100 SKILLED NURSING BEDS ARE CERTIFIED FOR PARTICIPATION IN THE MEDICARE AND MEDICAID PROGRAMS. SMITH VILLAGE IS SUBJECT TO PERIODIC REGULATORY INSPECTIONS PERFORMED BY IDPH. 0 0 8891318 9826620 THE ORGANIZATION PROVIDES RETIREMENT HOUSING AND HEALTH CARE SERVICES TO SENIORS AGED 62 AND OLDER IN A CONTINUING CARE RETIREMENT COMMUNITY SETTING. SMITH VILLAGE OPERATES A 100 BED SKILLED NURSING CARE UNIT. SERVICES PROVIDED INCLUDE 24-HOUR NURSING CARE AND REHABILITATION SERVICES. ALLOWANCE FOR CONTRACTUAL ADJUSTMENTS WERE $294,903 OF SERVICES FOR THESE TWO GOVERNMENTAL SPONSORED PROGRAMS. THE COMMUNITY ALSO PROVIDED $270,553 IN HEALTH CARE DISCOUNTS TO ITS RESIDENTS. 5269846 3393443 THE ORGANIZATION PROVIDES RETIREMENT HOUSING AND HEALTH CARE SERVICES TO SENIORS AGED 62 AND OLDER IN A CONTINUING CARE RETIREMENT COMMUNITY SETTING. WITHIN THE COMMUNITY, SMITH VILLAGE OPERATES 152 INDEPENDENT LIVING APARTMENTS. SMITH VILLAGE BEGAN OPERATION OF THESE UNITS IN NOVEMBER 2007. NOT ALL UNITS WERE OCCUPIED AS OF THE END OF THE FYE 2012. RESIDENTS RECEIVE DISCOUNTED SERVICES IN HEALTHCARE SHOULD THEY REQUIRE TRANSITION TO ASSISTED LIVING OR INTO SKILLED CARE. RESIDENTS WHO OUTLIVE THEIR FINANCIAL RESOURCES CAN APPLY FOR SUPPORT THROUGH THE CHARITABLE CARE FUNDS OF SMITH VILLAGE. 2934820 400611 3801172 THE ORGANIZATION PROVIDES RETIREMENT HOUSING AND HEALTH CARE SERVICES TO SENIORS AGED 62 AND OLDER IN A CONTINUING CARE RETIREMENT COMMUNITY SETTING. SMITH VILLAGE OPERATES A 82 UNIT ASSISTED LIVING CENTER. SERVICES INCLUDE PROVISION OF ASSISTANCE TO INDIVIDUALS WHO CAN NO LONGER LIVE INDEPENDENTLY AND NEED ASSISTANCE WITH AT LEAST THREE ACTIVITIES OF DAILY LIVING SUCH AS EATING, BATHING, DRESSING, MEDICATIONS, ETC. INDIVIDUALS RESIDING IN ASSISTED LIVING WHO HAVE OUTLIVED THEIR FINANCIAL RESOURCES ARE FURTHER SUPPORTED BY THE CHARITABLE CARE FUNDS OF SMITH VILLAGE. DURING FYE 2012, $400,611 IN CHARITABLE SERVICES WERE PROVIDED TO RESIDENTS IN ASSISTED LIVING. 351064 839073 THE ORGANIZATION PROVIDES BASE PACKAGES OF SERVICES TO RESIDENTS WITHIN A SET MONTHLY OR DAILY FEE STRUCTURE. RESIDENTS CAN CHOOSE TO SECURE ADDED SERVICES FOR ADDITIONAL FEES IN AREAS SUCH AS BEAUTY AND BARBER SERVICES, ADDITIONAL DINING OPTIONS, UNDERGROUND PARKING, TECHNOLOGY SERVICES, AND SPECIAL EVENT PARTICIPATION. 192845 THE ORGANIZATION OWNS AND OPERATES A 17 UNIT APARTMENT BUILDING RESTRICTED TO SENIOR ADULTS. THESE UNITS PROVIDE AFFORDABLE HOUSING ALTERNATIVES WITHOUT ANY OF THE SERVICES PROVIDED WITHIN THE SCOPE OF THE CONTINUING CARE RETIREMENT COMMUNITY. 351064 1031918 17447048 1 1 0 1 0 0 0 0 1 1 1 1 0 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 1 16 0 1 295 1 0 0 0 0 0 0 0 0 0 0 X 9 9 0 1 1 0 1 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 IL X RAY MARNERIS 7734747350 2320 WEST 113TH PLKACE CHICAGO IL 60643 GEORGE E PETRAITIS 2.00 X X 0 0 0 ALLEN K FLAGLER 1.00 X 0 0 0 THOMAS L HOGAN 1.00 X 0 0 0 STEVEN J MURPHY 2.00 X 0 0 0 KARYN PETTIGREW 1.00 X 0 0 0 WILLIAM H HUNDING 3.00 X X 0 0 0 HUGH J AHERN 1.00 X 0 0 0 ROBERT BERGHOFF 1.00 X 0 0 0 THOMAS E CHOMICZ 2.00 X 0 0 0 MICHAEL A FLYNN 12.00 X 0 182020 31355 RAYMOND J MARNERIS 12.00 X 0 83042 15821 MEAGAN ROHAN 1.00 X 19200 0 738 KEVIN MCGEE 37.50 X 115835 0 27637 EDUARDO TORRES 37.50 X 116595 0 5932 DEBORAH HART 0.00 X 0 108493 9905 251630 373555 91388 2 1 1 0 MORRISON SENIOR DINING PO BOX 102289 ATLANTA GA 30268 DINING SERVICES 1775423 WASHINGTON & JANE SMITH HOME 2320 W 113TH PLACE CHICAGO IL 60643 MANAGEMENT SERVICES 1704714 WASHINGTON & JANE SMITH HOME 2320 W 113TH PLACE CHICAGO IL 60643 NURSING SERVICES 1445937 ALLIANCE REHAB 1520 KENSINGTON ROAD OAKBROOK IL 60523 CONTRACT REHAB SERVICES 1080698 ALLIANCE PHARMACY 1520 KENSINGTON ROAD OAKBROOK IL 60523 CONTRACT PHARMACY 289421 10 434403 145437 579840 NURSING CARE SERVICES 623000 8290265 8290265 ASSISTED LIVING SERVCE 623000 4201783 4201783 INDEPENDENT LIVING SER 623000 3122890 3122890 ANCILLARY SERVICES 623000 1806909 1806909 ENTRANCE FEES RECOGNIZ 623000 275023 275023 265599 265599 17962469 91493 91493 286601 286601 207767 80823 126944 126944 90684 36260 361463 241543 119920 119920 119920 19167267 18053153 0 534274 400611 400611 256410 256410 4726462 4726462 74251 74251 581093 581093 366849 366849 1704714 1704714 70434 70434 325 325 4929766 4764660 165106 213738 19944 193794 394602 335346 59256 27838 11002 16836 703083 703083 34093 22918 11175 2367437 2367437 2353604 2353604 128050 124121 3929 TAXES AND FEES 268823 268823 19602183 17447048 2155135 0 500 500 1289607 978115 1073630 918630 73360 81228 71243816 13013345 60018507 58230471 268838 3499838 4477466 4781968 4646766 3643388 71848674 72134138 2251640 2697068 1613214 1662746 39569456 38867323 162955 256444 26966248 27866116 70563513 71349697 X 1219321 724825 65840 59616 1285161 784441 71848674 72134138 X -434916 -65804 X X 0 1 1 X 0 X 840816 661412 587517 711632 579840 3381217 10857229 12778937 14236810 17644749 17962469 73480194 11698045 13440349 14824327 18356381 18542309 76861411 435576 413248 459114 506563 400611 2215112 0 435576 413248 459114 506563 400611 2215112 74646299 600523 192554 220365 222730 432210 1668382 600523 192554 220365 222730 432210 1668382 167573 64519 232092 12466141 13697422 15044692 18579111 18974519 78761885 0.94770 0.94070 0.02120 0.02350 X SCHEDULE A, PART II, LINE 12, EXPLANATION OF OTHER INCOME: VARIOUS SMALL ITEMS RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 8633 8633 0 EXPLANATION OF LOBBYING ACTIVITIES: PART II-B, LINE 1: THE EXPENSES DETAILED ABOVE REPRESENT AN ALLOCATION OF MEMBERSHIP DUES TO LSN ASSOCIATION. 0 1 11903799 -85920 434403 121962 11261514 10274728 2092619 463548 11903799 9837732 870994 418398 15600 10274728 10661483 -418068 405683 9837732 0.07000 0.93000 0 1 1 1674140 1674140 66051240 11182263 54868977 3518436 1831082 1687354 58230471 FIXED INCOME - GICS 4781968 F 4781968 BOND ISSUANCE COSTS, NET 1141053 COST OF ACQUIRING INITIAL CONTINUING-CARE CONTRACTS, NET 1774182 DUE FROM AFFILIATES 728153 3643388 REFUNDABLE ENTRANCE FEES 21478839 OTHER CURRENT LIABILITIES 13830 REFUNDABLE RESERVATION DEPOSITS 538764 NOTE PAYABLE TO AFFILIATE 5834683 27866116 19167267 19602183 -434916 -65804 -65804 -500720 18781674 -65804 80822 15018 18766656 400611 400611 19167267 19282394 80822 80822 19201572 400611 400611 19602183 PART IV, LINE 2B: RESIDENTS CAN ELECT TO USE THE ORGANIZATION FOR THE MANAGEMENT OF THEIR FUNDS THROUGH THE RESIDENT TRUST ACCOUNTS. THERE IS NO UPPER LIMIT ON AMOUNTS THAT CAN BE ACCEPTED. RESIDENTS AUTHORIZE THE ORGANIZATION TO UTILIZE THEIR FUNDS TO PAY FOR ITEMS AS NEEDED. ALL FUNDS ARE HELD SEPARATELY FROM CORPORATE FUNDS, BUT COMMINGLED WITH OTHER RESIDENTS' FUNDS. INTEREST IS PAID ON A PASS-THROUGH BASIS FROM BANKING INSTITUTIONS. NO ADDITIONAL FEES ARE INCURRED FOR RESIDENTS TO UTILIZE THIS TRUST FUND ARRANGEMENT. DESCRIPTION OF INTENDED USE OF ENDOWMENT FUNDS: PART V, LINE 4: THE ENDOWMENT FUND IS HELD BY WASHINGTON AND JANE SMITH HOME D/B/A SMITH SENIOR LIVING (SSL), A RELATED TAX-EXEMPT ORGANIZATION. SSL DISBURSES FUNDS AS NEEDED WITHIN THE GUIDELINES OF THE ENDOWMWNT FUND. THE EARNINGS ON THE ASSETS OF THE ENDOWMENT FUND HAVE BEEN DESIGNATED TO SUPPORT THE CHARITABLE CARE ACTIVITIES OF SMITH VILLAGE. DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: THE ORGANIZATION QUALIFIES AS A TAX-EXEMPT CORPORATION DESCRIBED IN SECTION 501 (C)(3) OF THE INTERNAL REVENUE CODE AND IS EXEMPT FROM FEDERAL INCOME TAXES ON RELATED INCOME PURSUANT TO SECTION 501(A) OF THE CODE. THE ORGANIZATION IS NOT AWARE OF ANY ACTIVITIES THAT WOULD JEOPARDIZE ITS TAX EXEMPT STATUS. SHOULD THAT STATUS BE CHALLENGED IN THE FUTURE, ALL YEARS SINCE INCEPTION COULD BE SUBJECT TO REVIEW BY THE IRS. THE ORGANIZATION'S 2011, 2010, AND 2009 TAX YEARS ARE OPEN FOR EXAMINATION BY THE IRS. PART XII, LINE 2D - OTHER ADJUSTMENTS: RENTAL REVENUE EXPENSES 80,822. PART XII, LINE 4B - OTHER ADJUSTMENTS: CHARITABLE CARE 400,611. PART XIII, LINE 2D - OTHER ADJUSTMENTS: RENTAL REVENUE EXPENSES 80,822. PART XIII, LINE 4B - OTHER ADJUSTMENTS: CHARITABLE CARE 400,611. 1 CHARITABLE CARE 32 400611 0 N/A N/A PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: THE ORGANIZATION'S CHARITABLE SUPPORT PROGRAM HAS TWO COMPONENTS. IN SEVERAL INSTANCES, THE ORGANIZATION HAS AGREED TO PROVIDE A FIXED AMOUNT PER MONTH IN CHARITABLE SUPPORT WITH THE EXPECTATION THAT THE INDIVIDUAL IS THEN RESPONSIBLE FOR THE BALANCE OF THEIR MONTHLY BILL. THE SECOND COMPONENT DESIGN IS WHEN AN INDIVIDUAL HAS ESSENTIALLY RUN OUT OF ASSETS AND THE ORGANIZATION CONTINUES TO PROVIDE ALL THE REQUIRED SERVICES WITH CHARITABLE CARE. X X X 0 0 0 0 0 0 0 0 0 MICHAEL A FLYNN 0 171245 0 0 0 10775 0 7473 0 23882 0 213375 0 0 RAYMOND J MARNERIS 0 80267 0 0 0 2775 0 4942 0 10879 0 98863 0 0 KEVIN MCGEE 109814 0 0 0 6021 0 4818 0 22819 0 143472 0 0 0 EDUARDO TORRES 110968 0 0 0 5627 0 4501 0 1431 0 122527 0 0 0 DEBORAH HART 0 43273 0 0 0 65220 0 2031 0 7874 0 118398 0 0 PART I, LINE 3 THE ORGANIZATION RELIES ON SMITH SENIOR LIVING (SSL), A RELATED TAX-EXEMPT ORGANIZATION TO DETERMINE THE COMPENSATION OF THE ORGANIZATIONS TOP MANAGEMENT OFFICIALS. THE COMPENSATION COMMITTEE OF SSL EVALUATES AND ESTABLISHES COMPENSATION AND REVIEWS PROTOCOL FOR THE ORGANIZATIONS CEO AND CFO. ANNUAL COMPENSATION COMPARISONS TO INDUSTRY PROFESSIONALS ARE GATHERED AND REVIEWED ON AN ANNUAL BASIS. DECISIONS ARE DOCUMENTED IN THE COMPENSATION COMMITTEE MEETING MINUTES. ILLINOIS FINANCE AUTHORITY 861091967 45200BVN5 2005-12-29 61805000 RE-DEVELOPED CAMPUS INTO A CCRC 0 0 0 23185000 63046169 4639852 3706008 1111028 250181 47790073 5549027 2006 1 0 1 1 0 1 1 1 0 0.00360 0.00360 1 0 1 1 LASALLE BANK NATIONAL 4.000000000000 0 0 1 NATIXIS 40.000000000000 1 0 X FORM 990, PART VI, SECTION A, LINE 3 THE ORGANIZATION HAS AN AGREEMENT WITH SMITH SENIOR LIVING TO OVERSEE AND MANAGE ITS DAY-TO-DAY OPERATIONS. THE INITIAL TERM OF THIS AGREEMENT WAS FOR A PERIOD OF ONE (1) YEAR. THIS AGREEMENT RENEWS ANNUALLY THEREAFTER UNLESS TERMINATED IN ACCORDANCE WITH OTHER TERMS AND CONDITIONS CONTAINED THEREIN. FURTHERMORE, CERTAIN SUBORDINATION AND DEFERRAL PROVISIONS APPLY IN CONNECTION WITH PAYMENT OF COMPENSATION TO SMITH SENIOR LIVING. UNDER THE TERMS OF THE AGREEMENT, THE ORGANIZATION MUST COMPENSATE SMITH SENIOR LIVING FOR MANAGEMENT SERVICES RENDERED. THE AGREEMENT ALSO CONTAINS A PROVISION TO COMPENSATE SMITH SENIOR LIVING FOR SUPPLEMENTAL SERVICES IT MAY PROVIDE ABOVE AND BEYOND THOSE ENUMERATED IN THE AGREEMENT. IN ADDITION, THE ORGANIZATION MUST PAY SMITH SENIOR LIVING AN ADDITIONAL SUM ON A MONTHLY BASIS AS REIMBURSEMENT FOR SMITH SENIOR LIVING'S OVERHEAD EXPENSES RELATED TO THE ORGANIZATION. EXPENSES INCURRED BY THE ORGANIZATION UNDER THIS AGREEMENT WERE $1,707,714. FORM 990, PART VI, SECTION A, LINE 4 THE ORGANIZATION MADE SIGNIFICANT CHANGES TO THEIR BYLAWS IN THE CURRENT YEAR. FORM 990, PART VI, SECTION A, LINE 6 SMITH VILLAGE HAS A SINGLE CLASS OF VOTING MEMBERS AND THE SOLE MEMBER OF THAT CLASS IS SMITH SENIOR LIVING, A RELATED ILLINOIS TAX-EXEMPT ORGANIZATION, WHICH SHALL CONTINUE FROM YEAR-TO-YEAR AS THE SOLE MEMBER OF THE ORGANIZATION. FORM 990, PART VI, SECTION A, LINE 7A THE ORGANIZATION MUST HAVE APPROVAL OF ITS SOLE MEMBER, SMITH SENIOR LIVING, BEFORE ELECTING OR REMOVING ANY OF THE ORGANIZATION'S TRUSTEES AND OFFICERS. FORM 990, PART VI, SECTION A, LINE 7B THE ORGANIZATION SHALL NOT TAKE ANY OF THE FOLLOWING ACTIONS WITHOUT THE APPROVAL OF THE SOLE MEMBER: (1) AMENDMENT OF THE ARTICLES OF INCORPORATION OF THIS CORPORATION. (2) AMENDMENT OF THE BYLAWS OF THIS CORPORATION. (3) MERGER, CONSOLIDATION OR DISSOLUTION OF THIS CORPORATION. (4) THE CREATION OF ANY SUBSIDIARIES OR AFFILIATES OF THIS CORPORATION. (5) ADOPTION OF THE BUSINESS PLAN APPROVED ANNUALLY BY THE BOARD OF TRUSTEES OF THIS CORPORATION. (6) ADOPTION OF THE ANNUAL BUDGET APPROVED BY THIS CORPORATION AND ANY ACTIONS TAKEN BY THIS CORPORATION WHICH WOULD OR COULD INVOLVE EXPENDITURES WHICH EXCEED ONE HUNDRED AND TEN PERCENT (110%) OF THE APPROVED BUDGETED AMOUNTS FOR SUCH EXPENDITURES. (7) THE SELECTION OF BANKING AFFILIATIONS, ACCOUNTING FIRMS OR LEGAL COUNSEL, AS WELL AS APPROVAL OF THE ENGAGEMENT OF ANY CONSULTANTS NOT SPECIFICALLY PROVIDED IN AN APPROVED BUDGET. (8) THE SELECTION AND RETENTION OF THE EXECUTIVE DIRECTOR OF THIS CORPORATION. (9) THE MAKING OF CAPITAL EXPENDITURES OR SALE OF ANY CAPITAL ASSETS BY THIS CORPORATION IN EXCESS OF FIFTY THOUSAND DOLLARS ($50,000) UNLESS PROVIDED IN THE ANNUAL BUDGET. (10) THE SELECTION OF THE MANNER AND LOCATION OF INVESTMENT OF ANY FUNDS. (11) THE EXTENSION OF ANY LOANS BY OR ANY BORROWING BY THIS CORPORATION. THE CEO AND CFO, EMPLOYEES OF SMITH SENIOR LIVING WHICH IS A RELATED TAX-EXEMPT ORGANIZATION, REPORTED ON PART VII DEVOTE APPROXIMATELY 12 HOURS PER WEEK TO SMITH VILLAGE. THE FOLLOWING TRUSTEES EACH DEVOTE APPROXIMATELY 1 TO 3 HOURS A WEEK TO SMITH VILLAGE. HUGH AHERN ROBERT BERGHOFF THOMAS CHOMICZ ALLEN FLAGLER THOMAS HOGAN WILLIAM HUNDING STEVEN MURPHY GEORGE PETRAITIS KARYN PETTIGREW FORM 990, PART VI, SECTION B, LINE 11 THE ORGANIZATION'S INTERNAL MANAGEMENT AND THE FINANCE COMMITTEE REVIEWS THE RETURN WITH ITS PAID TAX PREPARER. AFTER REVIEW, COPIES OF THE FULL FORM 990 ARE PRESENTED TO ALL TRUSTEES AND REVIEWED AT A BOARD MEETING PRIOR TO FILING THE RETURN WITH THE IRS. FORM 990, PART VI, SECTION B, LINE 12C ANNUALLY ALL TRUSTEES AND KEY PERSONNEL ARE REQUIRED TO COMPLETE A DISCLOSURE FOR CONFLICTS OF INTEREST. THE DISCLOSURES ARE REVIEWED BY THE CFO WHO DETERMINES IF A POTENTIAL OR ACTUAL CONFLICT OF INTEREST EXISTS. IF A POTENTIAL OR ACTUAL CONFLICT OF INTEREST EXISTS THE TRUSTEE IS REQUIRED TO RECUSE THEMSELVES FROM ANY VOTING, DELIBERATION, OR DECISION ON THE TRANSACTION AT THE BOARD LEVEL. FURTHERMORE, ALL VENDOR PAYMENT ACTIVITY IS REVIEWED BY THE CFO FOR VENDORS THAT MAY BE RELATED TO THE FILING ORGANIZATION. FORM 990, PART VI, SECTION B, LINE 15 THE ORGANIZATION RELIES ON SMITH SENIOR LIVING (SSL), A RELATED TAX-EXEMPT ORGANIZATION TO DETERMINE THE COMPENSATION OF THE ORGANIZATION'S TOP MANAGEMENT OFFICIALS. THE COMPENSATION COMMITTEE OF SSL EVALUATES AND ESTABLISHES COMPENSATION AND REVIEWS PROTOCOL FOR THE ORGANIZATION'S CEO AND CFO. ANNUAL COMPENSATION COMPARISONS TO INDUSTRY PROFESSIONALS ARE GATHERED AND REVIEWED ON AN ANNUAL BASIS. DECISIONS ARE DOCUMENTED IN THE COMPENSATION COMMITTEE MEETING MINUTES. THE LAST COMPENSATION REVIEW WAS COMPLETED IN 2012. THE CEO OF SSL DETERMINES THE ANNUAL COMPENSATION OF ALL OTHER OFFICERS, WITH THE EXCEPTION OF THE CFO, BY COMPARING THE COMPENSATION OF EACH OFFICER AND KEY EMPLOYEES TO PROFESSIONALS PERFORMING SIMILAR SERVICES IN SIMILAR INDUSTRIES ON AN ANNUAL BASIS. THE LAST COMPENSATION REVIEW WAS COMPLETED IN 2012. FORM 990, PART VI, SECTION C, LINE 19 ANNUALLY ALL TRUSTEES AND KEY PERSONNEL ARE REQUIRED TO COMPLETE A DISCLOSURE FOR CONFLICTS OF INTEREST. THE DISCLOSURES ARE SUMMARIZED BY THE CFO AND REVIEWED BY THE GOVERNANCE COMMITTEE WHO DETERMINES IF A POTENTIAL OR ACTUAL CONFLICT OF INTEREST EXISTS. IF A POTENTIAL OR ACTUAL CONFLICT OF INTEREST EXISTS THE TRUSTEE IS REQUIRED TO RECUSE THEMSELVES FORM ANY VOTING. DELIBERATION, OR DECISION ON THE TRANSACTION AT THE BOARD LEVEL. FURTHERMORE, ALL VENDOR PAYMENT ACTIVITY IS REVIEWED BY THE CFO FOR VENDORS THAT MAY BE RELATED TO THE FILING ORGANIZATION. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET UNREALIZED LOSSES ON INVESTMENTS: -65,804. FORM 990, PAGE 12, PART XII, LINE 2C AUDIT COMMITTEE AND FINANCIAL STATEMENT OVERSIGHT THIS PROCESS HAS NOT CHANGED FROM THE PRIOR YEAR. WJS - SMITH SENIOR LIVING 2320 WEST 113TH PLACE CHICAGO IL 60643 364335178 MANAGEMENT IL 501(C)(3) LINE 11A, I N/A 0 WJS - SMITH CROSSING 10501 EMILIE LANE ORLAND PARK IL 60467 364333423 CCRC IL 501(C)(3) LINE 9 SSL 0 0 0 1 0 1 0 0 0 1 0 0 1 0 0 0 0 0 0 SMITH SENIOR LIVING E 2065330 COST SMITH SENIOR LIVING E 1500000 COST SMITH SENIOR LIVING C 434403 COST SMITH SENIOR LIVING I 46680 COST SMITH SENIOR LIVING L 3150651 COST