Related Conflict of Interest Policies

Title : Standards for Determining Independence of Members of Board of Directors Number : 742, Version : 5

A. Corporate government best practices require that members performing certain functions on the Board of Directors of Banner Health or its subsidiaries must be independent from Banner. This policy provides criteria for determining whether a member of the Board of Directors of Banner Health or a subsidiary is independent of Banner or the subsidiary. II. Definitions: A. Banner means Banner Health, an Arizona nonprofit corporation, and any Related Organization of Banner Health. B. Business Transactions means all business transactions (other than loans or grants), including without limitation contracts of sale, lease, license, management agreements, and performance of services, whether initiated during the current calendar year or ongoing from a prior year. Business Transactions also include joint ventures, whether new or ongoing, in which either the profits or capital interest of Banner and of the Interested Person exceeds 10%. C. Family Member means, with respect to a director, the director’s spouse, ancestors, brothers and sisters (whether whole or half blood), children (whether natural or adopted), grandchildren, great-grandchildren, and spouses of brothers, sisters, children, grandchildren, and great-grandchildren. D. Former means an individual who was an officer, director or Key Employee of Banner at any time during the preceding five complete calendar years. E. Interested Person means (1) a current or Former officer, director or Key Employee of Banner, (2) a Family Member of a current or Former officer, director or Key Employee of Banner, (3) an entity more than 35% owned, directly or indirectly, individually or collectively, by one or more current or Former officers, directors or Key Employees of Banner, or their Family Members, (4) an entity (other than a tax-exempt organization under Section 501(c) of the Internal Revenue Code) of which a current or Former officer, director or Key Employee of Banner was serving, at the time of a relevant transaction, as an (i) officer, (ii) director, (iii) Key Employee, (iv) partner or member with a direct or indirect ownership interest in excess of 5% (including ownership by a Family Member of the officer, director or Key Employee), or (v) a shareholder of a professional corporation with an ownership interest in excess of 5% (including ownership by a Family Member of the officer, director or Key Employee). F. Key Employee means an employee who meets each of the following tests: (1) receives $150,000 in reportable compensation from the relevant organization and all of its Related Organizations for the applicable calendar year; and (2) either (i) has responsibilities, powers or influence over the organization as a whole similar to those of officers or directors, (ii) manages a discrete segment or activity of the organization that represents 10% or more of the activities, assets, income or expenses of the organization, or (iii) has or shares authority to control or determine 10% or more of the organization’s capital expenditures, operating budget, or compensation for employees; and (3) is one of the 20 employees with the highest reportable compensation from the relevant organization and all of its Related Organizations. G. Related Organization means, with respect to the relevant organization, (1) an organization that is controlled by, under common control with, or controls the relevant organization, and (2) an organization that is (or claims to be) a supporting organization within the meaning of Section 509(a)(3) of the Internal Revenue Code of the relevant organization, or a supported

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