2011-07-07T15:07:50-05:00 2010-08-31 RSM MCGLADREY INC 221 THIRD AVENUE SE SUITE 300 CEDAR RAPIDS IA 524011512 990 2009-09-01 420841485 ACT INC ACTI 3193371000 PO BOX 168 IOWA CITY IA 522430168 THOMAS J GOEDKEN 3193371000 2011-06-30 1 Kay Hegarty 3192985333 2009 2016-02-24 21:20:13Z JON WHITMORE PO BOX 168 IOWA CITY IA 522430168 606111736 0 X WWW.ACT.ORG X 1960 IA HELPING PEOPLE ACHIEVE EDUCATION AND WORKPLACE SUCCESS 13 10 2147 845 13185236 132124 640000 1660477 243483440 260965498 -6058892 11486908 0 238064548 274112883 2213877 9400478 0 89263865 93121302 0 0 137652847 135689362 229130589 238211142 8933959 35901741 362721541 392693266 87264153 88236030 275457388 304457236 ACT, INC. (ACT) WAS ESTABLISHED AS A CORPORATION NOT FOR PECUNIARY PROFIT UNDER THE LAWS OF THE STATE OF IOWA ON AUGUST 23, 1960. THE PURPOSE AND MISSION OF ACT IS TO ADVANCE EDUCATION BY PROVIDING PROGRAMS, SERVICES, AND CONDUCTING RESEARCH THAT ASSISTS: A) INDIVIDUALS PLANNING AND PURSUING EDUCATION AND TRAINING, B) EDUCATORS DELIVERING INSTRUCTION AND TRAINING, AND C) POLICY MAKERS CONCERNED WITH ENSURING THAT INDIVIDUALS ARE READY FOR EDUCATION AND WORKPLACE SUCCESS. 1 0 169686810 9385478 215550114 EDUCATION ASSESSMENT SERVICES - ACT'S EDUCATION ASSESSMENT SERVICES ARE DESIGNED AND DEVELOPED TO INFORM INDIVIDUALS (AND THOSE HELPING THEM) ABOUT THE KNOWLEDGE AND SKILLS NEEDED FOR SUCCESS IN EDUCATION AND EVENTUALLY CAREER. INFORMATION RESULTING FROM THE ADMINISTRATION OF THE ASSESSMENTS ENABLE INDIVIDUALS TO PREPARE THEMSELVES FOR A NEXT LEVEL OF EDUCATION AND/OR TRAINING. AND THEY PROVIDE EDUCATORS AND TRAINERS WITH INFORMATION USEFUL IN GUIDING THEIR TEACHING AND INSTRUCTION. COLLECTIVELY, DATA RESULTING FROM THE ADMINISTRATION OF THE ASSESSMENTS FACILITATES RESEARCH ON EFFECTIVE EDUCATIONAL PRACTICES OF VALUE TO NATIONAL, STATE AND LOCAL EDUCATORS AND POLICY MAKERS. 29944731 15000 32230148 WORKFORCE DEVELOPMENT ASSESSMENT SERVICES - ACT'S WORKFORCE DEVELOPMENT ASSESSMENT SERVICES ARE COMPLEMENTARY OF ITS EDUCATION ASSESSMENT SERVICES IN THAT THEY FOCUS ON HELPING INDIVIDUALS TO ACQUIRE THE SKILLS THAT THEY NEED FOR SUCCESS IN THE WORKPLACE. THE SERVICES HELP INDIVIDUALS TO UNDERSTAND THE SKILLS THEY WILL NEED TO BE READY FOR WORKPLACE RELATED EDUCATION AND TRAINING PROGRAMS. THE ASSESSMENTS ARE USED WIDELY BY EDUCATORS AND TRAINERS TO PRESCRIBE AND PROVIDE INSTRUCTIONAL INTERVENTIONS FOR THOSE INDIVIDUALS. COLLECTIVELY, DATA RESULTING FROM THE ADMINISTRATION OF THE ASSESSMENTS ENABLES RESEARCH ON NATIONAL, STATE, AND REGIONAL SKILL GAPS IN THE LABOR POOL AND FACILITATES DECISIONS AND STRATEGIES FOR ADDRESSING THEM. 199631541 1 1 0 1 0 0 0 0 0 1 0 1 0 0 1 0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 1 0 0 0 0 0 1 1 0 0 1 10376 0 2147 1 1 1 1 NL HK KS CH AS SP 0 0 0 0 0 0 0 13 10 1 0 1 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 1 1 CA IL LA MA MI MN NY OH OR NH X THOMAS J GOEDKEN 3193371000 500 ACT DRIVE IOWA CITY IA 522430168 RICHARD L FERGUSON 66.00 X X 1018233 0 44887 DIXIE L AXLEY 5.00 X 57000 0 0 JAMES E BOSTIC JR 5.00 X 56500 0 0 SARITA E BROWN 5.00 X 52000 0 0 CARL A COHN 5.00 X 35250 0 0 D ROBERT GRAHAM 5.00 X 52500 0 0 KAREN A HOLBROOK 5.00 X 53500 0 0 ROBERTS T JONES 5.00 X 51500 0 0 MARK D MUSICK 5.00 X X 49500 0 16500 CHARLES B REED 5.00 X 56500 0 0 RICHARD W RILEY 5.00 X 38000 0 16500 J THEODORE SANDERS 5.00 X 48000 0 0 BELLE S WHEELAN 5.00 X X 57000 0 0 THOMAS GOEDKEN 60.00 X 320993 0 66708 CYNTHIA SCHMEISER 58.00 X 334500 0 95795 MARTIN L SCAGLIONE 58.00 X 294507 0 64991 ARTHUR C PETERS 57.00 X 213300 0 39768 ANN YORK 48.00 X 231421 0 37100 THOMAS SATERFIEL 45.00 X 226346 0 68331 JON ERICKSON 71.00 X 224144 0 71252 ROSE RENNEKAMP 46.00 X 215812 0 53891 DOUGLAS BECKER 48.00 X 204270 0 41470 RANJIT SIDHU 43.00 X 265351 0 52541 4156127 0 669734 90 0 1 0 NCS PEARSON INC 2510 N DODGE ST IOWA CITY IA 52245 COMPUTER PROCESSING 27441924 ROLTA TUSC INC 377 E BUTTERFIELD RD STE 100 LOMBARD IL 60148 CONSULTING 3651436 FEDERAL EXPRESS CORP 942 S SHADY GROVE RD MEMPHIS TN 38120 FREIGHT AND SHIPPING 3123155 MSI SYSTEMS INTEGRATORS 14301 1ST NATIONAL PKWY STE 400 OMAHA NE 68154 DATA PROCESSING 2324828 UNITED PARCEL SERVICE LOCKBOX 577 CAROL STREAM IL 60132 FREIGHT AND SHIPPING 2268876 119 1660477 1660477 EDUCATIONAL ASSESSMENT 611710 215550114 215550114 WORKFORCE DEVELOPMENT 541900 45415384 32230148 13185236 260965498 6419666 6419666 337058125 7970 331970228 28625 5087897 -20655 5067242 5067242 274112883 247780262 13185236 11486908 9400478 9400478 3476133 1950527 1525606 67338651 60752556 6586095 8400822 7502228 898594 8745257 7767361 977896 5160439 4608453 551986 871681 14 871667 183350 183350 52406 52406 896229 896229 30391378 28254843 2136535 550314 462509 87805 28776391 21301309 7475082 7624315 6718827 905488 45306 2486 42820 5743146 624333 5118813 4775102 4144564 630538 2275690 1273519 1002171 760728 760728 13922364 5952626 7969738 520700 2098 518602 TEST ADMINISTRATION 37066865 37066865 BAD DEBTS 866353 866353 MEMBERSHIP FEES 180716 124070 56646 STATE TAXES (UBIT) 73466 73466 FEDERAL TAXES (UBIT) 34778 34778 78084 42388 35696 238211142 199631541 38579601 0 30307670 32800740 41972199 21257982 3587390 2906250 2871389 4448290 144449136 78363383 68739583 66085753 142150488 242313238 62966926 16671117 10125896 6209896 362721541 392693266 23212153 21292346 23191363 27450309 34850000 33875000 353301 75389 5657336 5542986 87264153 88236030 X 272879125 304457236 2578263 0 275457388 304457236 362721541 392693266 X 0 1 1 X 1 1 X 640000 1660477 2300477 175938301 201972325 215000757 230131241 260965498 1084008122 175938301 201972325 215000757 230771241 262625975 1086308599 744764 1856626 2601390 27394998 35366570 28301121 29868001 30934592 151865282 27394998 35366570 28301121 30612765 32791218 154466672 931841927 6230571 8012395 7876843 7036999 6419666 35576474 6230571 8012395 7876843 7036999 6419666 35576474 350165 604781 193568 215650 132124 1496288 182519037 210589501 223071168 238023890 269177765 1123381361 0.82950 0.82200 0.03170 0.03370 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 1 0 0 0 0 1 101364 0 0 101364 0 Part IV, Supplemental Information: PART II-B, OTHER INFORMATION ACT HAS CERTAIN EMPLOYEES LOCATED IN WASHINGTON, D.C. THAT ARE REGISTERED LOBBYISTS. IN ADDITION, ACT CONTRACTED WITH A LOBBYING FIRM DURING THE YEAR TO ASSIST IN MONITORING FEDERAL AND STATE LEGISLATIVE ACTIVITY AND HELPING TO STRENGTHEN ACT'S RELATIONSHIPS WITHIN EACH STATE CONCERNING ACT INITIATIVES AND PROGRAMS. 4402630 4402630 67508445 19477849 48030596 5539945 4719310 820635 66998116 54166224 12831892 66085753 INTEREST RATE SWAP 2463849 ACTUARIAL ESTIMATE OF EMPLOYEE BENEFIT PLAN LIABILITY 3079137 5542986 274112883 238211142 35901741 -147814 -6754079 -6901893 28999848 273332381 -147814 -653343 -801157 274133538 -20655 -20655 274112883 244332533 8882119 8882119 235450414 2760728 2760728 238211142 Part X: Description of Uncertain Tax Positions Under FIN 48: FIN 48 FOOTNOTE FROM AUDITED FINANCIAL REPORT, NOTES 1 AND 5 NOTE 1 - INCOME TAXES ACT WAS INCORPORATED UNDER THE NONPROFIT CORPORATION ACT OF IOWA ON AUGUST 23, 1960 AND WAS GRANTED EXEMPTION FROM FEDERAL INCOME TAX UNDER SECTION 501 (C)(3) OF THE INTERNAL REVENUE CODE AS OF MAY 3, 1965. NCEA WAS GRANTED NON-PROFIT STATUS BY THE INTERNAL REVENUE SERVICE IN A DETERMINATION LETTER DATED FEBRUARY 28, 2008. SEE NOTE 5 FOR INFORMATION ON INCOME TAXES ON UNRELATED BUSINESS INCOME. ACT AND NCEA EACH FILE A FORM 990 (RETURN OF ORGANIZATION EXEMPT FROM INCOME TAX) ANNUALLY. WHEN THESE RETURNS ARE FILED, IT IS HIGHLY CERTAIN THAT SOME POSITIONS TAKEN WOULD BE SUSTAINED UPON EXAMINATION BY THE TAXING AUTHORITIES, WHILE OTHERS ARE SUBJECT TO UNCERTAINTY ABOUT THE MERITS OF THE TAX POSITION TAKEN OR THE AMOUNT OF THE POSITION THAT WOULD ULTIMATELY BE SUSTAINED. EXAMPLES OF TAX POSITIONS COMMON TO NOT-FOR-PROFIT ORGANIZATIONS INCLUDE SUCH MATTERS AS THE FOLLOWING: THE TAX EXEMPT STATUS OF EACH ENTITY AND VARIOUS POSITIONS RELATIVE TO POTENTIAL SOURCES OF UNRELATED BUSINESS TAXABLE INCOME (UBIT). UBIT IS REPORTED ON FORM 990-T, AS APPROPRIATE. THE BENEFIT OF A TAX POSITION IS RECOGNIZED IN THE FINANCIAL STATEMENTS IN THE PERIOD DURING WHICH, BASED ON ALL AVAILABLE EVIDENCE, MANAGEMENT BELIEVES THAT IT IS MORE LIKELY THAN NOT THAT THE POSITION WILL BE SUSTAINED UPON EXAMINATION, INCLUDING THE RESOLUTION OF APPEALS OR LITIGATION PROCESSES, IF ANY. TAX POSITIONS ARE NOT OFFSET OR AGGREGATED WITH OTHER POSITIONS. TAX POSITIONS THAT MEET THE "MORE LIKELY THAN NOT" RECOGNITION THRESHOLD ARE MEASURED AS THE LARGEST AMOUNT OF TAX BENEFIT THAT IS MORE THAN 50 PERCENT LIKELY TO BE REALIZED ON SETTLEMENT WITH THE APPLICABLE TAXING AUTHORITY. THE PORTION OF THE BENEFITS ASSOCIATED WITH TAX POSITIONS TAKEN THAT EXCEEDS THE AMOUNT MEASURED AS DESCRIBED ABOVE IS REFLECTED AS A LIABILITY FOR UNCERTAIN TAX BENEFITS IN THE ACCOMPANYING BALANCE SHEETS ALONG WITH ANY ASSOCIATED INTEREST AND PENALTIES THAT WOULD BE PAYABLE TO THE TAXING AUTHORITIES UPON EXAMINATION. NOTE 5 - INCOME TAXES ACT HAS CERTAIN REVENUE FROM PROGRAMS AND SERVICES THAT, BY VIRTUE OF A 1980 AGREEMENT WITH THE INTERNAL REVENUE SERVICE, IS DEEMED TO BE UNRELATED TO ITS TAX-EXEMPT PURPOSE AND, THEREFORE, MAY BE SUBJECT TO FEDERAL AND STATE INCOME TAX. UNRELATED BUSINESS REVENUE FOR THE YEARS ENDED AUGUST 31, 2010 AND 2009 TOTALED $13,185,236 AND $13,352,201, RESPECTIVELY. THE TAXABLE INCOME AND INCOME TAX LIABILITY FOR THE YEAR ENDED AUGUST 31, 2010 IS $132,124 AND $34,778, RESPECTIVELY. THE TAXABLE INCOME AND INCOME TAX LIABILITY FOR THE YEAR ENDED AUGUST 31, 2009 IS $215,650 AND $67,354, RESPECTIVELY. ACT HAS APPLIED FOR THE VOLUNTARY DISCLOSURE PROGRAM IN 15 STATES WITH REGARD TO POTENTIAL STATE INCOME LAX LIABILITY ON ITS UNRELATED BUSINESS REVENUE. AS OF AUGUST 31, 2010, MANAGEMENT DOES NOT ANTICIPATE A SIGNIFICANT STATE INCOME TAX LIABILITY RESULTING FROM THIS PROGRAM. AS OF AUGUST 31, 2010 AND 2009, THERE WERE NO UNCERTAIN TAX BENEFITS IDENTIFIED AND RECORDED AS A LIABILITY, EXCEPT FOR A POTENTIAL LIABILITY RELATED TO THE VOLUNTARY DISCLOSURE PROGRAM NOTED ABOVE WHICH IS NOT MEASURABLE AS OF AUGUST 31, 2010. FORMS 990 AND 990-T FILED BY ACT ARE SUBJECT TO EXAMINATION BY THE INTERNAL REVENUE SERVICE (IRS) UP TO THREE YEARS FROM THE EXTENDED DUE DATE OF EACH RETURN. FORMS 990 AND 990-T FILED BY ACT ARE NO LONGER SUBJECT TO EXAMINATION FOR THE FISCAL YEARS ENDED AUGUST 31, 2006 AND PRIOR. FORM 990 FILED BY NCEA AS OF AUGUST 31, 2010, 2009, AND 2008 COULD BE SUBJECT TO EXAMINATION. Part XI, Line 8 - Other Adjustments: NET (DEPRECIATION) IN FAIR VALUE OF INTEREST RATE SWAPS: -534638. (DECREASE) IN NET ASSETS - FOREIGN SUBSIDIARIES: -1336993. (DECREASE) IN NET ASSETS - NATL CENTER FOR EDUCATIONAL ACHIEVEMENT: -1533111. (LOSS) OF NONMARKETABLE EQUITY SECURITIES - EDLINK: -412237. (IMPAIRMENT) ON NONMARKETABLE EQUITY SECURITIES: -823620. NATL CENTER FOR EDUCATIONAL ACHIEVEMENT - GRANT DEFERRAL: -2113480. Part XII, Line 2d - Other Adjustments: NATL CENTER FOR EDUCATIONAL ACHIEVEMENT - GRANT ADJUSTMENT: -2000000. NATL CENTER FOR EDUCATIONAL ACHIEVEMENT REVENUE - SEPARATE ENTITY: 4432864. NET (DEPRECIATION) IN FAIR VALUE OF INTEREST RATE SWAPS: -534638. INTEREST EXPENSE NETTED WITH REVENUE FOR AUDIT: -760728. INTERCOMPANY REVENUE - AES: -145448. INTERCOMPANY REVENUE - ABS: -50700. ACT INTERNATIONAL REVENUE - SEPARATE ENTITIES: 1754644. (LOSS) OF NONMARKETABLE EQUITY SECURITIES - EDLINK: -412237. (IMPAIRMENT) ON NONMARKETABLE EQUITY SECURITIES: -823620. NATL CENTER FOR EDUCATIONAL ACHIEVEMENT - GRANT DEFERRAL: -2113480. Part XII, Line 4b - Other Adjustments: (LOSS) ON SALE OF EQUIPMENT: -20655. Part XIII, Line 2d - Other Adjustments: NATL CENTER FOR EDUCATIONAL ACHIEVEMENT EXPENSES - SEPARATE ENTITY: 5965975. INTERCOMPANY REVENUE- AES: -145448. INTERCOMPANY REVENUE- ABS: -50700. ACT INTERNATIONAL EXPENSES - SEPARATE ENTITIES: 3091637. LOSS ON SALE OF EQUIPMENT: 20655. Part XIII, Line 4b - Other Adjustments: NATL CENTER FOR EDUCATIONAL ACHIEVEMENT GRANT ADJUSTMENT: 2000000. INTEREST EXPENSE NETTED WITH REVENUE FOR AUDIT: 760728. Central America and the Caribbean 0 0 PROGRAM SERVICES TESTING SERVICES 0 East Asia and the Pacific 0 0 PROGRAM SERVICES TESTING SERVICES 0 Europe (Including Iceland & Greenland) 0 0 PROGRAM SERVICES TESTING SERVICES 339829 Middle East and North Africa 0 0 PROGRAM SERVICES TESTING SERVICES 0 North America 0 0 PROGRAM SERVICES TESTING SERVICES 720091 Russia & the Newly Independent States 0 0 PROGRAM SERVICES TESTING SERVICES 0 South America 0 0 PROGRAM SERVICES TESTING SERVICES 0 South Asia 0 0 PROGRAM SERVICES TESTING SERVICES 0 Sub-Saharan Africa 0 0 PROGRAM SERVICES TESTING SERVICES 0 East Asia and the Pacific INVESTMENTS N/A Europe (Including Iceland & Greenland) INVESTMENTS N/A 0 0 1059920 Method Used to Acccount for Expenditures: Schedule F, Part I, Line 3: THE FOREIGN EXPENDITURES REPORTED ON SCHEDULE F RELATE TO THE ADMINISTRATION OF ACT ASSESSMENTS INTERNATIONALLY. ACT MAY HAVE OTHER FOREIGN EXPENDITURES IN THE REGIONS LISTED THAT SUPPORT THE PROGRAMS OF ACT'S FOREIGN SUBSIDIARIES. THESE AMOUNTS ARE NOT SEPARATELY TRACKED AND ARE NOT REFLECTED IN THE AMOUNTS REPORTED. 1 THE EDUCATION TRUST INC 1250 H St STE 700 Washington DC 20006 521982223 501(c)(3) 15000 SPONSORSHIP OF CONFERENCE UNIVERSITY OF IOWA FOUNDATION 500 Alumni Center PO Box 4550 Iowa City IA 52244 420796760 501(c)(3) 5025000 $5,000 ANN YORK SCHOLARSHIP FUND; $20,000 TOMAS KUBINEK SYMPHONY PROJECT; $5,000,000 ACT SCHOLARS PROGRAM UNITED WAY OF JOHNSON COUNTY 1150 5th St STE 290 Coralville IA 52241 426062055 501(c)(3) 57273 UNRESTRICTED CONTRIBUTION KIRKWOOD COMMUNITY COLLEGE FOUNDATION 1030 5th Ave SE STE 2700 Cedar Rapids IA 52403 237076632 501(c)(3) 2015000 $2,000,000 ESTABLISHMENT OF ACT STEM SCHOLARSHIP PROGRAM; $15,000 WORKPLACE LEARNING CONNECTION UNIVERSITY OF IOWA 129 E Washington St Iowa City IA 52242 426004813 501(c)(3) 5250 $5,000 MATH CONFERENCES; $250 DANCE MARATHON AMERICAN CANCER SOCIETY 4080 1st St NE STE 101 Cedar Rapids IA 52402 131788491 501(c)(3) 11000 $10,000 HOPE LODGE PLEDGE; $1,000 RELAY FOR LIFE IOWA CITY CHAMBER OF COMMERCE 325 E Washington Ste 100 Iowa City IA 52240 420330530 501(c)(6) 9300 $7000 EDUCATION PREMIER PROGRAM SPONSOR; $1,500 SMALL BUSINESS OF THE YEAR AWARD SPONSOR; $800 ANNUAL TABLE BANQUET SPONSOR DIVERSITY FOCUS 205 2nd Ave SE Cedar Rapids IA 52401 203420207 501(c)(3) 40000 SPONSORSHIP COMMUNITY FOUNDATION OF JOHNSON COUNTY 325 E Washington St Iowa City IA 52240 421508117 501(c)(3) 25000 UNITED WAY HEALTHY KIDS SCHOOL BASED CLINICS IOWA CITY COMMUNITY SCHOOL DISTRICT FOUNDATION 509 S Dubuque St Iowa City IA 52240 421177023 501(c)(3) 25000 UNRESTRICTED CONTRIBUTION INSTITUTE OF INTERNATIONAL EDUCATION Office of Development 809 United Nations Plaza New York NY 10017 131624046 501(c)(3) 10610 RELIEF TO HAITIAN STUDENTS NATIONAL GOVERNORS ASSOCIATION CENTER FOR BEST PRACTICES 444 N Capitol St STE 267 Washington DC 20001 237391796 501(c)(3) 20000 CORPORATE FELLOWS PROGRAM WESTERN INTERSTATE COMMISSION FOR HIGHER EDUCATION 3035 CENTER GREEN DR STE 200 BOULDER CO 80301 846008945 501(c)(3) 75000 SUPPORT FOR 8TH EDITION OF "KNOCKING ON THE COLLEGE DOOR: PROJECTIONS OF HIGH SCHOOL GRADUATES BY STATE AND RACE/ETHNICITY" HISPANIC ASSOCIATION OF COLLEGES AND UNIVERSITIES 8415 DATAPOINT DR STE 400 SAN ANTONIO TX 78229 742466103 501(c)(3) 10000 SUPPORT "ACT ON THE DREAM COALITION" NORTH LIBERTY COMMUNITY LIBRARY 520 W CHERRY ST PO BOX 320 NORTH LIBERTY IA 52317 420926682 501(c)(3) 50000 BUILDING CAMPAIGN NATIONAL CENTER FOR EDUCATIONAL ACHIEVEMENT 4030-2 W BRAKER LN SUITE 200 AUSTIN TX 78759 260778560 501(c)(3) 2000000 FOR USE IN GENERAL OPERATIONS 15 1 Procedure for Monitoring Grants in the U.S.: Part I, Line 2: Schedule I, Part I, Line 2: ALL GRANTS AND CONTRIBUTIONS ARE REVIEWED AND APPROVED BY THE CEO PRIOR TO PAYMENT. MONTHLY FINANCIALS ARE PREPARED BY NCEA AND SENT TO ACT FOR REVIEW. TOM GOEDKEN, ACT CFO, REVIEWS THE INCOME STATEMENT EACH MONTH AND DISCUSSES IT WITH ROXANA GALAN, NCEA CFO. IN ADDITION, MR. GOEDKEN ALSO LOOKS AT NCEA'S BALANCE SHEET ON A QUARTERLY BASIS. IN ADDITION TO MR. GOEDKEN'S REVIEW, CYNTHIA SCHMEISER, ACT COO, REVIEWS NCEA OPERATIONS AS ONE OF ACT'S PROJECTS. THIS ENTAILS REVIEWING MONTHLY FINANCIALS AND DISCUSSIONS WITH ANGELA HALL WATKINS, NCEA MANAGING DIRECTOR. X X 1 1 X X X X X 0 1 0 0 0 0 0 0 0 RICHARD L FERGUSON 603067 0 402700 0 12466 0 39200 0 5687 0 1063120 0 51323 0 THOMAS GOEDKEN 311767 0 7500 0 1726 0 53686 0 13022 0 387701 0 0 0 CYNTHIA SCHMEISER 320577 0 7500 0 6423 0 79031 0 16764 0 430295 0 0 0 MARTIN L SCAGLIONE 285324 0 7500 0 1683 0 51030 0 13961 0 359498 0 0 0 ARTHUR C PETERS 206342 0 5000 0 1958 0 25374 0 14394 0 253068 0 0 0 ANN YORK 177068 0 5000 0 49353 0 29378 0 7722 0 268521 0 0 0 THOMAS SATERFIEL 219435 0 5000 0 1911 0 53888 0 14443 0 294677 0 0 0 JON ERICKSON 217286 0 5000 0 1858 0 59801 0 11451 0 295396 0 0 0 ROSE RENNEKAMP 208796 0 5000 0 2016 0 41847 0 12044 0 269703 0 0 0 DOUGLAS BECKER 198098 0 5000 0 1172 0 24414 0 17056 0 245740 0 0 0 RANJIT SIDHU 259458 0 5000 0 893 0 37863 0 14678 0 317892 0 0 0 Part I, Line 1a THOMAS GOEDKEN, CYNTHIA SCHMEISER, AND MARTIN SCAGLIONE RECEIVED AMOUNTS FOR SPOUSAL TRAVEL. THESE AMOUNTS ARE TAXABLE TO THE EMPLOYEE AND ARE REFLECTED IN REPORTABLE COMPENSATION ON SCHEDULE J, PART II, COLUMN (B)(III). THOMAS SATERFIEL, JON ERICKSON, ANN YORK, RANJIT SIDHU, AND DOUGLAS BECKER RECEIVED AMOUNTS FOR HEALTH OR SOCIAL CLUB DUES. THESE AMOUNTS ARE TAXABLE TO THE EMPLOYEE AND ARE REFLECTED IN REPORTABLE COMPENSATION ON SCHEDULE J, PART II, COLUMN (B)(III). Part I, Line 4a PART II, COLUMN (B)(II), REPORTABLE INCENTIVE COMPENSATION FOR RICHARD FERGUSON INCLUDES A DISTRIBUTION FROM A NON-QUALIFIED SUPPLEMENTAL RETIREMENT PLAN IN THE AMOUNT OF $341,377 AS WELL AS A DISTRIBUTION OF DEFERRED COMPENSATION UNDER IRC SECTION 457(F) IN THE AMOUNT OF $51,323 THAT WAS REPORTED ON A PRIOR YEAR FORM 990. NCEA SEE SCH O 4906999 SEE SCH O 0 Form 990, Part III, line 2 New Program Services EFFECTIVE AUGUST 31, 2010, THE ACTIVITIES OF NATIONAL CENTER FOR EDUCATIONAL ACHIEVEMENT ("NCEA") WERE MERGED INTO ACT, INC. ("ACT"). PRIOR TO THE MERGER, NCEA WAS AN ENTITY SEPARATE FROM, BUT CONTROLLED BY ACT THROUGH ACT'S APPOINTMENT OF ALL DIRECTORS ON THE NCEA BOARD. NCEA WAS ORGANIZED AS A TEXAS NONPROFIT CORPORATION AND WAS RECOGNIZED AS A TAX-EXEMPT ORGANIZATION UNDER IRC SECTION 501(C)(3) WITH AN EDUCATIONAL PURPOSE AND MISSION SIMILAR TO THAT OF ACT. THE BOARD OF DIRECTORS OF ACT AND THE BOARD OF DIRECTORS OF NCEA CONCLUDED THAT IT WAS IN THE BEST INTERESTS OF BOTH ENTITIES FOR NCEA TO BE MERGED INTO ACT TO CONTINUE THE MISSION AND OBJECTIVES OF NCEA: TO HELP K-12 STUDENTS REACH COLLEGE AND CAREER READINESS. Form 990, Part VI, Section A, line 2 SOME OFFICERS AND DIRECTORS HAVE A BUSINESS RELATIONSHIP WITH OTHER OFFICERS AND DIRECTORS TO THE EXTENT THAT THEY ALSO SERVE TOGETHER ON THE BOARDS OF OTHER ENTITIES: (1) RICHARD FERGUSON AND THOMAS GOEDKEN ARE DIRECTORS OF ACT INTERNATIONAL B.V. (2) RICHARD FERGUSON AND THOMAS GOEDKEN ARE DIRECTORS OF ACT EDUCATION SOLUTIONS LTD (HONG KONG). (3) RICHARD FERGUSON AND THOMAS GOEDKEN ARE DIRECTORS OF ACT EDUCATION SOLUTIONS (AUSTRALIA) PTY LTD. (4) RICHARD FERGUSON AND THOMAS GOEDKEN ARE DIRECTORS OF ACT INFORMATION CONSULTING (SHANGHAI) CO LTD. (5) RICHARD FERGUSON AND THOMAS GOEDKEN ARE DIRECTORS OF ACT BUSINESS SOLUTIONS B.V. (6) RICHARD FERGUSON, THOMAS GOEDKEN, CHARLES REED, AND ROBERTS JONES ARE DIRECTORS AND/OR OFFICERS OF NATIONAL CENTER FOR EDUCATIONAL ACHIEVEMENT (NCEA). (7) RICHARD FERGUSON, THOMAS GOEDKEN, AND J THEODORE SANDERS ARE DIRECTORS OF TEACHERS SUPPORT NETWORK (TSN). Form 990, Part VI, Section A, line 4 SIGNIFICANT CHANGES TO THE ARTICLES OF INCORPORATION AND BYLAWS (1) THE EXEMPT PURPOSE WAS RE-WORDED AND NOW READS AS FOLLOWS: THE CORPORATION SHALL BE ORGANIZED AND OPERATED EXCLUSIVELY TO FURTHER EDUCATIONAL, SCIENTIFIC, OR CHARITABLE PURPOSES WITHIN THE MEANING OF SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR THE CORRESPONDING PROVISION OF ANY FUTURE FEDERAL TAX CODE (THE "CODE"), INCLUDING, FOR SUCH PURPOSES, THE MAKING OF DISTRIBUTIONS TO ORGANIZATIONS THAT QUALIFY AS EXEMPT ORGANIZATIONS UNDER SECTION 501(A) OF THE CODE BY REASON OF DESCRIPTION IN SECTION 501(C)(3) OF THE CODE. THE CORPORATION'S PURPOSES SHALL INCLUDE, BUT NOT BE LIMITED TO, ADVANCING EDUCATION BY PROVIDING PROGRAMS, SERVICES, AND CONDUCTING RESEARCH THAT ASSISTS: (A) INDIVIDUALS PLANNING AND PURSUING EDUCATION AND TRAINING, (B) EDUCATORS DELIVERING INSTRUCTION AND TRAINING, AND (C) POLICY MAKERS CONCERNED WITH ENSURING THAT INDIVIDUALS ARE READY FOR EDUCATION AND WORKPLACE SUCCESS. TO ENABLE THE CORPORATION TO CARRY OUT SUCH PURPOSES, IT SHALL HAVE THE POWER TO DO ANY AND ALL LAWFUL ACTS AND TO ENGAGE IN ANY AND ALL LAWFUL ACTIVITIES, DIRECTLY OR INDIRECTLY, ALONE OR IN CONJUNCTION WITH OTHERS, WHICH MAY BE NECESSARY, PROPER OR SUITABLE FOR THE ATTAINMENT OF ANY OF THE PURPOSES FOR WHICH THE CORPORATION IS ORGANIZED. (2) THE ARTICLES OF INCORPORATION FORMERLY STATED THAT THE CHIEF EXECUTIVE OFFICER SHALL SERVE AS A DIRECTOR AND AS BOARD CHAIR. THE REVISED ARTICLES NOW STATE THAT THE CHIEF EXECUTIVE OFFICER SHALL SERVE AS A DIRECTOR. THE BYLAWS NOW SPECIFY THAT THE BOARD CHAIR WILL BE A DIRECTOR OTHER THAN THE CHIEF EXECUTIVE OFFICER. (3) THE POLICIES AND PROCEDURES IN THE BYLAWS REGARDING COMPENSATION OF OFFICERS AND DIRECTORS WAS RE-WORDED TO ADJUST FOR THE CHANGE DESCRIBED IN (2) ABOVE. THIS IS NOT CONSIDERED A SUBSTANTIVE CHANGE. THE COMPENSATION PROCEDURES NOW READ AS FOLLOWS: THE BOARD OF DIRECTORS SHALL DETERMINE COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER UPON RECOMMENDATION OF THE EXECUTIVE COMMITTEE OF THE BOARD, IN ACCORDANCE WITH APPLICABLE COMPENSATION POLICIES OF THE CORPORATION. COMPENSATION FOR DIRECTORS SHALL BE DETERMINED IN ACCORDANCE WITH APPLICABLE COMPENSATION POLICIES OF THE CORPORATION. Form 990, Part VI, Section B, line 11 PROCEDURES FOR REVIEW OF FORM 990 THE AUDIT COMMITTEE OF THE CORPORATION CONDUCTS A SUBSTANTIVE REVIEW OF THE FORM 990 PRIOR TO ITS FILING WITH THE ASSISTANCE OF THE CORPORATION'S CHIEF FINANCIAL OFFICER, COUNSEL, AND STAFF. THE FINAL VERSION OF THE FORM 990 IS PROVIDED TO ALL OF THE MEMBERS OF THE CORPORATION'S BOARD OF DIRECTORS BEFORE IT IS FILED WITH THE IRS. Form 990, Part VI, Section B, line 12c ACT HAS CREATED AN ETHICS ADVISORY COMMITTEE. MEMBERS OF THE ETHICS ADVISORY COMMITTEE REVIEW CONFLICT OF INTEREST QUESTIONNAIRES SUBMITTED BY EMPLOYEES AND ARE RESPONSIBLE FOR SEEING THAT CONFLICTS OF INTEREST ARE INVESTIGATED AND APPROPRIATELY ADDRESSED. THEY ALSO WORK CLOSELY WITH ACT'S HUMAN RESOURCES DEPARTMENT TO DEVELOP EDUCATION AND TRAINING PROGRAMS FOR EMPLOYEES REGARDING THE CONFLICTS OF INTEREST POLICY AND ETHICS ISSUES. THE ETHICS ADVISORY COMMITTEE REPORTS DIRECTLY TO THE AUDIT COMMITTEE OF ACT'S BOARD OF DIRECTORS. CONFLICT OF INTEREST QUESTIONNAIRES SUBMITTED BY DIRECTORS OR OFFICERS ARE REVIEWED AND ADDRESSED BY THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS. Form 990, Part VI, Section B, line 15 COMPENSATION OF OFFICERS AND DIRECTORS IS DETERMINED BY THE BOARD BASED UPON AN INDEPENDENT COMPENSATION STUDY CONDUCTED BY A PROFESSIONAL FIRM. COMPENSATION OF KEY EMPLOYEES IS INFORMED BY THE SAME STUDY AND IS ESTABLISHED BY THE BOARD ANNUALLY. ALL OTHER EMPLOYEE COMPENSATION IS REVIEWED AT LEAST ANNUALLY, UNDER THE DIRECTION OF THE HUMAN RESOURCE DEPARTMENT. Form 990, Part VI, Section C, line 19 ACT DOES NOT MAKE ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC. FORM 990, PART VII, SECTION A: PER ACT POLICY, BOARD MEMBERS ARE EXPECTED TO PARTICIPATE IN FOUR THREE-DAY BOARD MEETINGS, COMMITTEE MEETINGS THAT OCCUR THROUGHOUT THE YEAR, AND AT OTHER TIMES TO DISCUSS IMPORTANT AND STRATEGIC MATTERS PERTAINING TO ACT. IN EXCHANGE FOR THEIR VALUABLE TIME AND SERVICE, ACT COMPENSATES THE BOARD WITH AN ANNUAL AMOUNT THAT IS PRORATED FOR MEETING ATTENDANCE AND PARTIAL YEARS OF SERVICE. THE LEAD DIRECTOR AND COMMITTEE CHAIRS, AS WELL AS BOARD MEMBERS WHO ARE REQUESTED TO PROVIDE TIME OTHER THAN FOR MEETING ATTENDANCE, RECEIVE ADDITIONAL COMPENSATION AT A COMMENSURATE HOURLY RATE. IN ADDITION TO SERVING AS CHAIRMAN OF THE BOARD, RICHARD FERGUSON ALSO SERVED AS CEO OF ACT. HIS COMPENSATION AS CEO IS DISCLOSED ON FORM 990, PART VII, SECTION A. HE RECEIVES NO ADDITIONAL COMPENSATION FOR SERVICE AS BOARD CHAIR. SOME BOARD MEMBERS HAVE CHOSEN TO FORGO COMPENSATION FOR THEIR SERVICES TO ACT. FORM 990, PART VII, SECTION A AND SCHEDULE J ACTUARIAL INCREASE IN EARLY RETIREMENT BENEFIT THE ORGANIZATION MAINTAINS A LEGACY EARLY RETIREMENT PLAN THAT HAS BEEN CLOSED TO NEW ENTRANTS. FORM 990, PART VII, SECTION A, COLUMN (F), "OTHER COMPENSATION" AND SCHEDULE J, PART II, COLUMN (C), "DEFERRED COMPENSATION" INCLUDES THE INCREASE IN ACTUARIAL VALUE THAT HAS OCCURRED TO AN INDIVIDUAL'S VESTED BALANCE DURING THE YEAR ENDED AUGUST 31, 2010. DEPENDING ON THE INDIVIDUAL'S AGE AT DATE OF RETIREMENT, THE ACTUAL EARLY RETIREMENT BENEFIT DISTRIBUTED AT THE TIME OF RETIREMENT MAY BE LESS THAN THE AMOUNT THAT IS CURRENTLY BEING INCLUDED IN OTHER/DEFERRED COMPENSATION. FORM 990, PART IV, LINE 12 AND PART XI, LINES 2B AND 2C AUDITED FINANCIAL STATEMENTS THE ORGANIZATION'S AUDIT COMMITTEE ASSUMES RESPONSIBILITY FOR OVERSIGHT OF THE AUDIT OF ITS FINANCIAL STATEMENTS AND SELECTION OF AN INDEPENDENT ACCOUNTANT. FORM 990, PART I, LINE 6 EXPLANATION OF ESTIMATE OF VOLUNTEERS APPROXIMATELY NINE THOUSAND REPRESENTATIVES FROM EDUCATIONAL INSTITUTIONS ARE MEMBERS OF ACT'S ADVISORY GROUPS THAT RECEIVE INFORMATION FROM ACT AND PROVIDE INPUT. OUT OF THIS GROUP, THERE ARE APPROXIMATELY 845 INDIVIDUALS WHO ACTIVELY VOLUNTEER THEIR TIME TO SERVE IN AN ADVISORY CAPACITY BY ATTENDING MEETINGS WITH ACT REGIONAL OFFICE STAFF TO PROVIDE INPUT. FORM 990, SCH L, PART IV EXPLANATION REGARDING NATIONAL CENTER FOR EDUCATIONAL ACHIEVEMENT (NCEA) (B) RELATIONSHIP BETWEEN INTERESTED PERSON AND THE ORGANIZATION: NCEA IS AN IRC SECTION 501(C)(3) EXEMPT ORGANIZATION WITH AN EDUCATIONAL PURPOSE AND MISSION SIMILAR TO THAT OF ACT, INC. NCEA IS A CONTROLLED ENTITY OF ACT, INC. IN THE SENSE THAT ACT, INC. APPOINTS ALL OF THE DIRECTORS ON THE NCEA BOARD OF DIRECTORS. ALL NCEA DIRECTORS AND/OR OFFICERS ARE ALSO DIRECTORS AND/OR OFFICERS OF ACT, INC. THIS INCLUDES (1) RICHARD FERGUSON, CEO/CHAIRMAN OF BOARD (2) THOMAS GOEDKEN, CFO/TREASURER, (3) CHARLES REED, DIRECTOR, AND (4) ROBERTS JONES, DIRECTOR. (D) DESCRIPTION OF TRANSACTION: NCEA PAID ACT $4,906,999 FOR SALARIES, BENEFITS, AND PAYROLL TAXES OF EMPLOYEES PROVIDING SERVICES TO NCEA THAT ARE LEASED FROM ACT, INC. 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