Department of the Treasury Internal Revenue Service
Public Charity Status and Public Support
Complete if the organization is a section 501(c)(3) organization or a section
4947(a)(1) nonexempt charitable trust.
Attach to Form 990 or Form 990-EZ. See separate instructions.
OMB No. 1545-0047
2011
Open to Public Inspection
Name of the organization
STOWERS RESOURCE MANAGEMENT INC
Employer identification number
41-2186719
Part I
Reason for Public Charity Status
(All organizations must complete this part.) See instructions
The organization is not a private foundation because it is: (For lines 1 through 11, check only one box.)
1
2
3
4
5
section 170(b)(1)(A)(iv). (Complete Part II.)
6
7
8
9
receipts from activities related to its exempt functions—subject to certain exceptions, and (2) no more than 331/3% of
its support from gross investment income and unrelated business taxable income (less section 511 tax) from businesses
acquired by the organization after June 30, 1975. See section 509(a)(2). (Complete Part III.)
10
11
e
By checking this box, I certify that the organization is not controlled directly or indirectly by one or more disqualified persons other than foundation managers and other than one or more publicly supported organizations described in section 509(a)(1) or section 509(a)(2).
f
If the organization received a written determination from the IRS that it is a Type I, Type II or Type III supporting organization, check this box
..................................................
g
Since August 17, 2006, has the organization accepted any gift or contribution from any of the following persons?
(i) a person who directly or indirectly controls, either alone or together with persons described in (ii)
Yes
No
and (iii) below, the governing body of the the supported organization?
................
11g(i)
No
(ii)
a family member of a person described in (i) above?
......................
11g(ii)
No
(iii)
a 35% controlled entity of a person described in (i) or (ii) above?
................
11g(iii)
No
h
Provide the following information about the supported organization(s).
(i) Name of supported organization
(ii) EIN
(iii) Type of organization (described on lines 1- 9 above or IRC section (see instructions))
(iv) Is the organization in col. (i) listed in your governing document?
(v) Did you notify the organization in col. (i) of your support?
(vi) Is the organization in col. (i) organized in the U.S.?
(vii) Amount of support?
Yes
No
Yes
No
Yes
No
(1)
STOWERS INSTITUTE FOR MEDICAL RESEARCH
202993509
04
Yes
Yes
Yes
79,507,600
Total
79,507,600
For Paperwork Reduction Act Notice, see the Instructions for Form 990.
Cat. No. 11285F
Schedule A (Form 990 or 990-EZ) 2011
Schedule A (Form 990 or 990-EZ) 2011
Page 2
Part II
Support Schedule for Organizations Described in IRC 170(b)(1)(A)(iv) and 170(b)(1)(A)(vi) (Complete only if you checked the box on line 5, 7, or 8 of Part I or if the
organization failed to qualify under Part III. If the organization fails to
qualify under the tests listed below, please complete Part III.)
Section A. Public Support
Calendar year(or fiscal year beginning in)
(a) 2007
(b) 2008
(c) 2009
(d) 2010
(e) 2011
(f) Total
1
Gifts, grants, contributions, and membership fees received. (Do not include any "unusual grants.") ....
2
Tax revenues levied for the organization's benefit and either paid to or expended on its behalf.......
3
The value of services or facilities furnished by a governmental unit to the organization without charge..
4
Total. Add lines 1 through 3..
5
The portion of total contributions by each person (other than a governmental unit or publicly supported organization) included
on line 1 that exceeds 2% of the amount shown on line 11, column (f)..
6
Public Support. Subtract line 5 from line 4.
Section B. Total Support
Calendar year(or fiscal year beginning in)
(a) 2007
(b) 2008
(c) 2009
(d) 2010
(e) 2011
(f) Total
7
Amounts from line 4..
8
Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources..
9
Net income from unrelated business activities, whether or not the business is regularly carried on..
10
Other income. (Explain in Part IV.) Do not include gain or loss from the sale of capital assets..
11
Total support (Add lines 7 through 10).
12
Gross receipts from related activities, etc. (See instructions.)
..................
12
13
First Five Years
If the Form 990 is for the organization's first, second, third, fourth, or fifth tax year as a 501(c)(3) organization,
check this box and stop here..........................................
Section C. Computation of Public Support Percentage
14
Public Support Percentage for 2010 (line 6 column (f) divided by line 11 column (f))
.........
14
15
Public Support Percentage for 2009 Schedule A, Part II, line 14
...............
15
16a
33 1/3% support test—2011.
If the organization did not check the box on line 13, and line 14 is 33 1/3% or more, check this box
and stop here. The organization qualifies as a publicly supported organization
......................
b
33 1/3% support test—2010.
If the organization did not check the box on line 13 or 16a, and line 15 is 33 1/3% or more, check this
box and stop here. The organization qualifies as a publicly supported organization
.....................
17a
10%-facts-and-circumstances test—2011.
If the organization did not check a box on line 13, 16a, or 16b and line 14
is 10% or more, and if the organization meets the "facts and circumstances" test, check this box and stop here. Explain
in Part IV how the organization meets the "facts and circumstances" test. The organization qualifies as a publicly supported
organization
..................................................
b
10%-facts-and-circumstances test—2010.
If the organization did not check a box on line 13, 16a, 16b, or 17a and line
15 is 10% or more, and if the organization meets the "facts and circumstances" test, check this box and stop here.
Explain in Part IV how the organization meets the "facts and circumstances" test. The organization qualifies as a publicly supported organization
..............................................
18
Private Foundation
If the organization did not check a box on line 13, 16a, 16b, 17a or 17b, check this box and see
instructions
...................................................
Schedule A (Form 990 or 990-EZ) 2011
Schedule A (Form 990 or 990-EZ) 2011
Page 3
Part III
Support Schedule for Organizations Described in IRC 509(a)(2) (Complete only if you checked the box on line 9 of Part I or if the organization
failed to qualify under Part II. If the organization fails to qualify under
the tests listed below, please complete Part II.)
Section A. Public Support
Calendar year(or fiscal year beginning in)
(a) 2007
(b) 2008
(c) 2009
(d) 2010
(e) 2011
(f) Total
1
Gifts, grants, contributions, and membership fees received. (Do not include any "unusual grants.") .
2
Gross receipts from admissions, merchandise sold or services performed, or facilities furnished in any activity that is related to the organization's tax-exempt purpose......
3
Gross receipts from activities that are not an unrelated trade or business under section 513..
4
Tax revenues levied for the organization's benefit and either paid to or expended on its behalf...
5
The value of services or facilities furnished by a governmental unit to the organization without charge..
6
Total. Add lines 1 through 5.
7a
Amounts included on lines 1, 2, and 3 received from disqualified persons...
b
Amounts included on lines 2 and 3 received from other than disqualified persons that exceed the greater of $5,000 or 1% of the amount on line 13 for the year.
c
Add lines 7a and 7b..
8
Public Support (Subtract line 7c from line 6.)
Section B. Total Support
Calendar year (or fiscal year beginning in)
(a) 2007
(b) 2008
(c) 2009
(d) 2010
(e) 2011
(f) Total
9
Amounts from line 6...
10a
Gross income from interest, dividends, payments received on securities loans, rents, royalties and income from similar sources..
b
Unrelated business taxable income (less section 511 taxes) from businesses acquired after June 30, 1975.
c
Add lines 10a and 10b.
11
Net income from unrelated business activities not included in line 10b, whether or not the business is regularly carried on.
12
Other income. Do not include gain or loss from the sale of capital assets (Explain in Part IV.)
13
Total support (Add lines 9, 10c, 11 and 12.).
14
First Five Years
If the Form 990 is for the organization's first, second, third, fourth, or fifth tax year as a 501(c)(3) organization,
check this box and stop here.............................................
Section C. Computation of Public Support Percentage
15
Public Support Percentage for 2011 (line 8 column (f) divided by line 13 column (f))
.........
15
16
Public support percentage from 2010 Schedule A, Part III, line 15
...............
16
Section D. Computation of Investment Income Percentage
17
Investment income percentage for 2011 (line 10c column (f) divided by line 13 column (f))
......
17
18
Investment income percentage from 2010 Schedule A, Part III, line 17
.............
18
19a
33 1/3% support tests—2011.
If the organization did not check the box on line 14, and line 15 is more than 33 1/3% and line 17 is not more than 33 1/3%, check this box and stop here. The organization qualifies as a publicly supported organization
..........
b
33 1/3% support tests—2010.
If the organization did not check a box on line 14 or line 19a, and line 16 is more than 33 1/3% and line 18 is not more than 33 1/3%, check this box and stop here. The organization qualifies as a publicly supported organization
....
20
Private Foundation
If the organization did not check a box on line 14, 19a or 19b, check this box and see instructions
.....
Schedule A (Form 990 or 990-EZ) 2011
Schedule A (Form 990 or 990-EZ) 2011
Page 4
Part IV
Supplemental Information.
Supplemental Information. Complete this part to provide the explanation required by Part II, line 10; Part II, line 17a or 17b; or Part III, line 12. Also complete this part for any additional information. (See instructions).
Facts And Circumstances Test
Explanation
Schedule A (Form 990 or 990-EZ) 2011
Additional Data
Software ID:
Software Version:
-
TIN:
SCHEDULE O (Form 990 or 990-EZ)
Department of the Treasury Internal Revenue Service
Supplemental Information to Form 990 or 990-EZ
Complete to provide information for responses to specific questions on
Form 990 or to provide any additional information.
Attach to Form 990 or 990-EZ.
OMB No. 1545-0047
2011
Open to Public Inspection
Name of the organization
STOWERS RESOURCE MANAGEMENT INC
Employer identification number
41-2186719
Identifier
Return Reference
Explanation
PART III, LINE 1:
THE STOWERS RESOURCE MANAGEMENT INC. ("SRM") OPERATES EXCLUSIVELY WITHIN THE MEANING OF CODE SECTIONS 501(C)(3) AND 509(A)(3). SRM'S CHARITABLE PURPOSE IS TO SUPPORT, BENEFIT, AND CARRY OUT THE PURPOSES OF ITS SUPPORTED ORGANIZATION. SRM CURRENTLY SUPPORTS STOWERS INSTITUTE FOR MEDICAL RESEARCH ("SIMR"). SIMR IS A TAX EXEMPT ORGANIZATION DESCRIBED IN SECTION 501(C)(3), AND PUBLIC CHARITY DESCRIBED IN SECTIONS 509(A)(1) AND 170(B)(1)(A)(III). SIMR IS ACTIVELY ENGAGED IN SCIENTIFIC RESEARCH IN THE PUBLIC INTEREST. SRM HELPS MANAGE SIMR'S ENDOWMENT, PROVIDES MANAGEMENT SUPPORT, AND FUNDRAISES FOR THEIR BENEFIT. THE MANAGEMENT SUPPORT INVOLVES ASSISTING IN PLANNING FOR THE STRATEGIC DIRECTION OF SIMR, OPERATIONAL PLANNING, DEVELOPMENT, AND IMPLEMENTATION OF STRATEGIC BUSINESS PLANS AND BUDGETS. THE CONTRIBUTIONS, GRANTS, AND INCOME FROM SRM'S ENDOWMENT ARE USED TO SUPPORT THE EXEMPT ACTIVITIES OF SIMR.
PART VI, LINE 2:
JAMES E. STOWERS JR., VIRGINIA G. STOWERS, AND JAMES E. STOWERS III, DIRECTORS OF SRM, HAVE A FAMILY RELATIONSHIP. CLIFFORD W. ILLIG, WILLIAM B. NEAVES, DAVID M. CHAO, RICHARD W. BROWN, AND RODERICK L. STURGEON, ALL DIRECTORS OF SRM, HAVE A BUSINESS RELATIONSHIP; THEY SERVE ON THE BOARD OF BIOMED VALLEY DISCOVERIES, INC. RICHARD W. BROWN, DAVID A. WELTE, AND RODERICK L. STURGEON HAVE A BUSINESS RELATIONSHIP; THEY SERVE ON THE BOARD OF AMERICAN CENTURY COMPANIES, INC. ("ACCI") AS DESCRIBED IN RESPONSE TO SCHEDULE L, PART IV.
PART VI, LINE 6 & 7A:
SIMR IS SRM'S SOLE MEMBER AND ELECTS SRM'S BOARD OF DIRECTORS.
PART VI, LINE 11B:
THE DATA AND INFORMATION NECESSARY TO PREPARE SRM'S FORM 990 IS COMPILED BY THE ACCOUNTING DEPARTMENT AND REVIEWED BY OUR TAX ATTORNEY AT BRYAN CAVE, LLP. PWC, OUR EXTERNAL TAX PREPARERS, USE THIS INFORMATION TO PREPARE THE FORM 990. THE COMPLETED FORM 990, INCLUDING REQUIRED SCHEDULES, IS REVIEWED BY THE OFFICERS OF SRM BEFORE IT IS FILED WITH THE IRS. AFTER THE PREPARATION AND REVIEW PROCESS DETAILED ABOVE, THE FORM 990, INCLUDING REQUIRED SCHEDULES, IS PROVIDED TO EACH VOTING MEMBER OF SRM'S BOARD BEFORE IT IS FILED WITH THE IRS.
PART VI, LINE 12C:
SRM HAS ADOPTED A "CONFLICTS OF INTEREST AND DIRECTOR INDEPENDENCE POLICY". EACH DIRECTOR, OFFICER, AND OTHER PERSON WHO IS IN A POSITION TO EXERCISE SUBSTANTIAL INFLUENCE OVER DECISIONS OF SRM ARE REQUIRED TO ANNUALLY COMPLETE AND SIGN A DISCLOSURE STATEMENT. A COVERED PERSON MUST DISCLOSE THE EXISTENCE OF A POTENTIAL CONFLICT AND ALL MATERIAL FACTS TO THE GOVERNING BOARD AS SOON AS THE PERSON HAS KNOWLEDGE THAT A POTENTIAL CONFLICT MIGHT EXIST. SRM ALSO CONDUCTS PERIODIC AND ADHOC REVIEWS OF TRANSACTIONS AND AGREEMENTS TO ENSURE THAT IT DOES NOT ENGAGE IN ACTIVITIES THAT ARE NOT CONSISTENT WITH ITS TAX-EXEMPT PURPOSE.
PART VI, LINES 15A & 15B:
THE PROCESS FOR DETERMINING THE REASONABLENESS OF THE COMPENSATION FOR SRM'S PRESIDENT, EXECUTIVE VICE-PRESIDENT/CHIEF FINANCIAL OFFICER, AND EXECUTIVE VICE-PRESIDENT/GENERAL COUNSEL INCLUDED RETAINING THE SERVICES OF A NATIONALLY KNOWN COMPENSATION CONSULTANT TO PROVIDE DATA AND ANALYSIS TO DETERMINE COMPARABLE SALARY AND BENEFITS FOR SIMILARLY QUALIFIED PERSONS IN COMPARABLE POSITIONS AT SIMILARLY SITUATED ORGANIZATIONS. COMPENSATION FOR ALL POSITIONS WAS DOCUMENTED IN EMPLOYMENT CONTRACTS WHICH WERE APPROVED BY THE GOVERNING BODY AS DOCUMENTED IN THE OFFICIAL MINUTES. THE LAST COMPLETED REVIEW PROCESS FOR THE PRESIDENT AND EVP/CFO POSITION WAS IN 2011 AND IN 2009 FOR THE EVP/GENERAL COUNSEL POSITION. ALSO, A REVIEW PROCESS FOR ALL SRM EXECUTIVES WAS COMMENCED IN SPRING 2012.
PART VI, LINE 19:
STOWERS RESOURCE MANAGEMENT INC.'S GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS ARE AVAILABLE UPON REQUEST.
PART VIII, LINE 2A:
SRM RECEIVED EXPENSE REIMBURSEMENTS FROM SIMR, A 501(C)(3) RELATED ORGANIZATION, IN THE AMOUNT OF $17,037,954 FOR SUPPORT SERVICES PROVIDED BY SRM.
PART VIII, LINE 2B:
SRM RECEIVED EXPENSE REIMBURSEMENTS FROM BVD, A RELATED PARTY, IN THE AMOUNT OF $185,976 FOR ADMINISTRATIVE SUPPORT SERVICES PROVIDED BY SRM. SRM ALLOCATED THE COSTS OF PROVIDING THESE SERVICES TO BVD. PART VIII, LINE 2C: SRM RECEIVED EXPENSE REIMBURSEMENTS FROM SPI, A RELATED PARTY, IN THE AMOUNT OF $12,000 FOR SUPPORT SERVICES PROVIDED BY SRM.
PART XI, LINE 5:
RECONCILIATION OF OTHER CHANGES IN NET ASSETS OR FUND BALANCES UNREALIZED GAINS ON MUTUAL FUND INVESTMENTS 432,517; UNREALIZED LOSS ON CLASS A STOCK (92,693,770); EQUITY TRANSFER FROM RELATED 501(C)(2) ORG (NOTE 1) 1,239,830; ANNUITY PAYMENT TO SIMR 30,000,000; ACTUARIAL LOSS ON ANNUITY OBLIGATION (20,199,202); TOTAL OTHER CHANGES IN NET ASSETS (81,220,625) NOTE 1: SRM ACCRUED PASS-THROUGH AMOUNTS OF $1,239,830 FROM STOWERS REAL ESTATE HOLDING CORPORATION ("SREHC"). SREHC REMITTED THE AMOUNT TO SRM IN 2012. SRM IS THE TAX EXEMPT PARENT OF SREHC. SREHC IS A TAX EXEMPT ORGANIZATION UNDER SECTION 501(C) (2) OF THE CODE, AND AS SUCH IS ORGANIZED TO HOLD TITLE TO REAL PROPERTY, COLLECT THE INCOME THEREFROM, AND REMIT THE ENTIRE AMOUNT, LESS EXPENSES AND REASONABLY NECESSARY CASH RESERVES TO ITS TAX EXEMPT PARENT, SRM. SREHC'S PASS-THROUGH NET INCOME COMES FROM THEIR MARCH 1, 2009 LEASE OF REAL PROPERTY TO STOWERS INSTITUTE FOR MEDICAL RESEARCH ("SIMR"); SIMR IS A SUPPORTED ORGANIZATION OF SRM.
SCHEDULE K, $215,000,000 BOND ISSUE SERIES:
PART I, LINE A, COLUMN D - ORIGINAL ISSUE DATE OF JULY 26, 2000, AS FILED ON FORM 8038. MATERIAL MODIFICATION OF BOND INDENTURES WHEN AMENDED TO ALLOW AUCTION RATE PROVISION TREATED AS REISSUANCE UNDER NOTICE 88-130 FOR FEDERAL TAX PURPOSES WITH FORM 8038 FILING ON JULY 31, 2003, SO SRM IS FILING SCHEDULE K. PART I, LINE A, COLUMN F - SRM AND STOWERS INSTITUTE FOR MEDICAL RESEARCH ("SIMR") ARE THE TWO MEMBERS OF AN OBLIGATED BOND GROUP FOR THESE TAX-EXEMPT BONDS; SRM IS A SUPPORTING ORGANIZATION OF SIMR AS DESCRIBED IN SRM'S MISSION STATEMENT AND REPORTED ON SCHEDULE R. THE BONDS WERE ISSUED FOR THE PURPOSE OF PURCHASING AN EXISTING MEDICAL CENTER AND SURROUNDING BUILDINGS, STRIPPING THE STRUCTURES TO THEIR INFRASTRUCTURE AND RECONSTRUCTING A STATE OF THE ART MEDICAL RESEARCH FACILITY FOR SIMR. PART II, LINE 7 - REPORTED ISSUANCE COSTS OF $6,245,000 INCLUDES $4,973,000 IN BOND INSURANCE PREMIUMS AND LIQUIDITY FACILITY FEES. PART II, LINE 10 - BOND ISSUE INCLUDES A REFUNDING OF BOND SERIES ISSUED IN 1998 OF $125,000,000 AND REMAINDER WAS USED TO FINANCE CAPITAL EXPENDITURES AS DESCRIBED IN PART I, COLUMN F. PART II, LINE 14 - $215,000,000 BOND ISSUE OF JULY 26, 2000, WAS PARTIALLY ISSUED TO RETIRE 1998 PRIOR BOND ISSUE OF $125,000,000. THE $125,000,000 BOND ISSUE WAS PAID OFF IN FULL IN OCTOBER 2000.
SCHEDULE K, $75,000,000 BOND ISSUE SERIES:
PART I, LINE B, COLUMN D - ORIGINAL ISSUE DATE OF MARCH 15, 2002, AS FILED ON FORM 8038. MATERIAL MODIFICATION OF BOND INDENTURES WHEN AMENDED TO ALLOW AUCTION RATE PROVISION TREATED AS REISSUANCE UNDER NOTICE 88-130 FOR FEDERAL TAX PURPOSES WITH FORM 8038 FILING ON JULY 31, 2003, SO SRM IS FILING SCHEDULE K. PART I, LINE B, COLUMN F - SRM AND STOWERS INSTITUTE FOR MEDICAL RESEARCH ("SIMR") ARE THE TWO MEMBERS OF AN OBLIGATED BOND GROUP FOR THESE TAX-EXEMPT BONDS; SRM IS A SUPPORTING ORGANIZATION OF SIMR AS DESCRIBED IN SRM'S MISSION STATEMENT AND REPORTED ON SCHEDULE R. THE BONDS WERE ISSUED FOR THE PURPOSE OF INTERIOR FINISH, FURNISHING AND EQUIPPING OF THE SHELL PORTION OF SIMR'S MEDICAL RESEARCH FACILITY THAT IS DESCRIBED ABOVE IN LINE A. PART II, LINE 7 - REPORTED ISSUANCE COSTS OF $2,268,638 INCLUDES $1,720,000 IN BOND INSURANCE PREMIUMS AND LIQUIDITY FACILITY FEES.
SCHEDULE K, PART IV, OTHER BOND INFORMATION:
IN RESPONSE TO THE VOLATILITY IN THE AUCTION RATE SECURITIES (ARS) MARKET, THE SEC'S DIVISION OF TRADING AND MARKETS AND DIVISION OF CORPORATE FINANCE ISSUED GUIDELINES UNDER WHICH THE SEC WOULD ALLOW ISSUERS TO BID ON AND REPURCHASE THEIR OWN SECURITIES. THESE REPURCHASED BONDS ARE NOT LEGALLY RETIRED AND CAN BE RESOLD IN THE ARS MARKET BY THE ISSUER. THE ORGANIZATION, OPERATING WITHIN THESE GUIDELINES, HAS BID ON AND PURCHASED SOME OF THEIR OWN SECURITIES. ALL THE BONDS ARE PLACED UP FOR BID IN WEEKLY ARS AUCTIONS. THE CARRYING AMOUNT OF THE TOTAL BONDS PAYABLE OUTSTANDING AT DECEMBER 31, 2011 IS $4,850,000 AS REPORTED ON FORM 990, PART X, BALANCE SHEET.
HOURS DEVOTED FOR RELATED ORGANIZATION
FORM 990 PART VII
NAME:WILLIAM B. NEAVES TITLE:DIRECTOR HOURS:44
HOURS DEVOTED FOR RELATED ORGANIZATION
FORM 990 PART VII
NAME:ROBERT E. KRUMLAUF TITLE:DIRECTOR HOURS:40
HOURS DEVOTED FOR RELATED ORGANIZATION
FORM 990 PART VII
NAME:DAVID M. CHAO TITLE:DIRECTOR HOURS:42
HOURS DEVOTED FOR RELATED ORGANIZATION
FORM 990 PART VII
NAME:RICHARD W. BROWN TITLE:DIRECTOR/CHAIR/PRESIDENT/CEO HOURS:10
HOURS DEVOTED FOR RELATED ORGANIZATION
FORM 990 PART VII
NAME:RODERICK L. STURGEON TITLE:DIRECTOR/EVP/CFO HOURS:10
HOURS DEVOTED FOR RELATED ORGANIZATION
FORM 990 PART VII
NAME:DAVID A. WELTE TITLE:DIRECTOR/SEC/GENERAL COUNSEL HOURS:8
For Paperwork Reduction Act Notice, see the Instructions for Form 990 or 990-EZ.