2020-07-14T12:02:24-05:00 2019-07-31 861065772 DELOITTE TAX LLP 555 MISSION STREET SAN FRANCISCO CA 94105 990 2018-08-01 956052058 NATIONAL ACADEMY OF RECORDING ARTS & SCIENCES INC NATI 3103923777 3030 OLYMPIC BOULEVARD SANTA MONICA CA 904045073 WAYNE ZAHNER CHIEF FINANCIAL OFFICER 3103923777 2020-07-13 1 JOAN S MCMAHON P00966494 4157834000 167.219.88.140 2020-07-13 18:28:16 PD P DA39A3EE5E6B4B0D3255BFEF95601890AFD80709 294B98C86494834D33D354154149B4F31E4339DE 2018 2020-09-23 17:36:50Z THE RECORDING ACADEMY WAYNE J ZAHNER 3030 OLYMPIC BOULEVARD SANTA MONICA CA 904045073 151277645 0 X WWW.GRAMMY.COM X 1987 DE OUR MISSION IS TO ADVANCE THE ARTS AND SCIENCES OF RECORDING AND TO FOSTER CREATIVE LEADERSHIP. 44 44 186 500 106039 -108421 1651223 1724516 88819294 82984592 4233107 4728033 1451851 2186223 96155475 91623364 6011975 8199132 0 0 22284658 22435427 0 0 0 61592213 59936549 89888846 90571108 6266629 1052256 138704299 138315613 23702924 24055850 115001375 114259763 X OUR MISSION IS TO ADVANCE THE ARTS AND SCIENCES OF RECORDING AND TO FOSTER CREATIVE LEADERSHIP FOR ARTISTIC, CULTURAL, EDUCATIONAL, AND TECHNICAL PROGRESS IN THE RECORDING FIELD. A PRIMARY ACTIVITY OF THE RECORDING ACADEMY IS THE RECOGNITION OF OUTSTANDING CREATIVE AND TECHNICAL ACHIEVEMENTS IN THE RECORDING ARTS OF THOSE DEEMED TO BE MOST WORTHY BY THEIR PEERS THROUGH THE ANNUAL PRESENTATION OF THE GRAMMY AWARDS. 0 0 0 0 0 THE RECORDING ACADEMY PRODUCES THE GRAMMY AWARDS, THE ONLY PEER-PRESENTED AWARD TO HONOR ARTISTIC ACHIEVEMENT, TECHNICAL PROFICIENCY AND EXCELLENCE IN THE RECORDING INDUSTRY, WITHOUT REGARD TO ALBUM SALES OR CHART POSITION. 0 0 1 1 0 0 0 0 1 1 1 0 1 1 1 0 1 0 0 0 0 0 0 0 0 0 1 1 1 0 0 0 1 0 0 1 0 0 0 0 1 1 1 0 1 X 247 0 1 186 1 1 1 0 0 0 1 1 0 1 0 X 44 44 1 0 0 0 1 1 0 1 1 0 1 1 1 1 1 1 1 1 1 0 0 CA IL NY X X WAYNE J ZAHNER 3103923777 3030 OLYMPIC BOULEVARD SANTA MONICA CA 904045073 NEIL PORTNOW PRESIDENT/CEO 40.00 1.20 X 1174972 0 130607 DARYL FRIEDMAN CHIEF INDUSTRY, GOVT & MEM 40.00 X 454126 0 34764 BRANDEN CHAPMAN EXEC IN CHARGE PROD/CBDO 40.00 1.20 X 427317 0 31939 WAYNE ZAHNER CHIEF FINANCIAL OFFICER 40.00 1.20 X 393697 0 23536 EVAN GREENE CHIEF MARKETING OFFICER 40.00 X 601636 0 42804 WILLIAM FREIMUTH VP AWARDS 40.00 X 333824 0 34939 GAETANO FRIZZI CHIEF PEOPLE & CULTURE OFFICER 40.00 X 304323 0 26527 RICHARD ENGDAHL CHIEF INFORMATION OFFICER 40.00 X 299878 0 23860 NEDA AZARFAR VP MARKETING COMMUNICATION 40.00 X 260232 0 17188 LAURA SEGURA VP MEMBERSHIP & INDUSTRY RELATIONS 40.00 X 218166 0 47620 JASON JAMES CHIEF DIGITAL OFFICER 40.00 X 277496 0 25901 ANN MINCIELI TRUSTEE (TO 5/31/19) 1.00 X 0 0 0 BOOKER T JONES TRUSTEE (TO 5/31/19) 1.00 X 0 0 0 BRIAN DECK TRUSTEE 1.00 X 0 0 0 CARL WALKER TRUSTEE 1.00 X 0 0 0 CARLOS ALVAREZ TRUSTEE (TO 5/31/19) 1.00 X 0 0 0 CATHERINE HARRIS-WHITE TRUSTEE 1.00 X 0 0 0 CHRISTINE ALBERT CHAIR EMERITUS 1.00 X 0 0 0 CLAUDIA MENKARSKI BRANDT TRUSTEE 1.00 X 0 0 0 DARRELL BROWN TRUSTEE (FROM 6/1/19) 1.00 X 0 0 0 DAVID MESSIER TRUSTEE 1.00 X 0 0 0 EMILY LAZAR TRUSTEE (FROM 6/1/19) 1.00 X 0 0 0 ERIC SCHILLING TRUSTEE (TO 5/31/19) 1.00 X 0 0 0 FLETCHER FOSTER TRUSTEE 1.00 X 0 0 0 GEORGE FLANIGEN IV TRUSTEE 1.00 X 0 0 0 GINO ROBAIR TRUSTEE (TO 5/31/19) 1.00 X 0 0 0 HARVEY MASON CHAIR (FR 6/19)/TRUSTEE(TO 5/19) 5.00 X 0 0 0 IVAN BARIAS TRUSTEE 1.00 X 0 0 0 JEFF BALDING TRUSTEE (TO 5/31/19) 1.00 X 0 0 0 JEFF LEVENSON TRUSTEE 1.00 X 0 0 0 JOHN BURK TRUSTEE 1.00 X 0 0 0 JOHN HOPKINS TRUSTEE (FROM 6/1/19) 1.00 X 0 0 0 JOHN POPPO NATIONAL CHAIR (TO 5/31/19) 5.00 X 0 0 0 JONATHAN MCREYNOLDS TRUSTEE (FROM 6/1/19) 1.00 X 0 0 0 JORGE MEJIA TRUSTEE (FROM 6/1/19) 1.00 X 0 0 0 JULIA MICHELS TRUSTEE (FROM 6/1/19) 1.00 X 0 0 0 JUSTIN ROBERTS TRUSTEE 1.00 X 0 0 0 KEN SHEPHERD TRUSTEE 1.00 X 0 0 0 LALAH HATHAWAY TRUSTEE 1.00 X 0 0 0 LEE LEVIN TRUSTEE 1.00 X 0 0 0 LESLIE ANN JONES TRUSTEE 1.00 X 0 0 0 MATT HENNESSY TRUSTEE (TO 5/31/19) 1.00 X 0 0 0 MATT STILL TRUSTEE (TO 5/31/19) 1.00 X 0 0 0 MICHAEL ROMANOWSKI TRUSTEE (FROM 6/1/19) 1.00 X 0 0 0 MIKE KNOBLOCH TRUSTEE 1.00 X 0 0 0 MINDI ABAIR TRUSTEE 1.00 X 0 0 0 NICK PHILLIPS TRUSTEE (TO 5/31/19) 1.00 X 0 0 0 NILE RODGERS TRUSTEE (TO 5/31/19) 1.00 X 0 0 0 OMMAS GRAHAM TRUSTEE (FROM 6/1/19) 1.00 X 0 0 0 PAUL SLAYTON TRUSTEE (FROM 6/1/19) 1.00 X 0 0 0 PIPER PAYNE TRUSTEE (FROM 6/1/19) 1.00 X 0 0 0 RICHARD BUTLER TRUSTEE (FROM 6/1/19) 1.00 X 0 0 0 RICHARD STUMPF TRUSTEE 1.00 X 0 0 0 RIGGS MORALES TRUSTEE 1.00 X 0 0 0 RUBY MARCHAND VICE CHAIR (TO 5/31/19) 5.00 X 0 0 0 SAMANTHA COX TRUSTEE (FROM 6/1/19) 1.00 X 0 0 0 SCOTT BILLINGTON TRUSTEE 1.00 X 0 0 0 SHANNON SANDERS TRUSTEE 1.00 X 0 0 0 SUE ENNIS TRUSTEE 1.00 X 0 0 0 TAMMY HURT V.C. (FR 6/19)/TRUSTEE (TO 5/19) 5.00 X 0 0 0 TERESA LABARBERA TRUSTEE (TO 5/31/19) 1.00 X 0 0 0 TERRI LYNE CARRINGTON TRUSTEE 1.00 X 0 0 0 TERRY HEMMINGS SECRETARY/TREASURER 1.00 X 0 0 0 TERRY JONES TRUSTEE 1.00 X 0 0 0 TIM PALMER TRUSTEE 1.00 X 0 0 0 TRACY GERSHON TRUSTEE 1.00 X 0 0 0 TRACY HAMLIN TRUSTEE 1.00 X 0 0 0 TREY FANJOY TRUSTEE (FROM 6/1/19) 1.00 X 0 0 0 4745667 0 439685 50 0 1 0 AEG EHRLICH VENTURES LLC 4355 LANAI ROAD ENCINO CA 91436 EVENT PRODUCTION 17822438 THE JOE LEWIS COMPANY INC 1209 MANHATTAN AVENUE 19 MANHATTAN BEACH CA 90266 EVENT PRODUCTION 2132224 GREENBERG TRAURIG LLP 3333 PIEDMONT ROAD NE 2500 ATLANTA GA 30305 LEGAL SERVICES 1472364 TBWA CHIAT DAY 5353 GROSVENOR BLVD LOS ANGELES CA 90066 ADVERTISING 1192318 PROSKAUER ROSE LLP 2049 CENTURY PARK EAST LOS ANGELES CA 90067 LEGAL SERVICES 1035240 57 1512619 211897 211897 1724516 TELECAST EVENT INCOME 900099 57875538 57875538 SPONSORSHIP INCOME 711130 12714851 106039 12608812 GRAMMY TICKET SALES 711130 11748912 11748912 PUBLICATION INCOME 711130 465289 465289 NARAS RELATED EVENTS 541800 180002 180002 82984592 5054817 5054817 1721494 1721494 59327497 59654281 -326784 -326784 -326784 OTHER INCOME 900099 352137 352137 FILM CLIP INCOME 900099 103001 103001 ANNUITY INCOME 900099 9591 9591 464729 91623364 12746340 106039 77046469 8168632 30500 4394180 13717666 678990 2416982 1227609 4522077 447447 150350 659315 5103371 3103847 2225347 2236677 4915793 3302925 1492785 521615 332265 EVENT PRODUCTION 23133229 EVENT EXPENSES 6962775 ENTERTAINMENT 690895 MISCELLANEOUS 135836 90571108 1700 1584 10209848 8239829 1189288 1603221 4400389 3939586 9364450 7116570 2644812 2247880 80446792 87064143 16957274 13965607 22854196 21253763 138704299 138315613 4671084 5034064 18309994 18146356 721846 875430 23702924 24055850 X 115001375 114259763 115001375 114259763 138704299 138315613 1052256 -1793868 0 X X 0 1 X 1 0 7723 7723 0 0 0 1 1512619 840619 268188 1108807 822887 285920 PART I-A, LINE 1: THE RECORDING ACEDEMY, FROM TIME TO TIME, HAS PAID FOR EXPENSES WHERE EVENTS ARE RAISING MONEY FOR THE GRAMMY FUND FOR MUSIC CREATORS, A RELATED POLITICAL ACTION COMMITTEE. 80446791 4500000 2776667 659315 87064143 75976177 750169 4347271 626826 80446791 65009235 4800011 6741834 574903 75976177 57891733 7186805 416680 485983 65009235 51670203 5972154 706545 457169 57891733 1.00000 1 0 5515031 3517236 1997795 3828413 3578328 250085 21006 21006 0 2247880 13965607 C 13965607 DUE FROM NARAS PROPERTIES, INC. 15307320 DUE FROM LATIN ACADEMY OF RECORDING ARTS & SCIENCES, INC. 701168 ROYALTY RECEIVABLE DUE FROM LATIN ACADEMY OF RECORDING ARTS & SCIENCES, INC. 1173178 DUE FROM MUSICARES FOUNDATION, INC. 1135610 OTHER RETIREMENT LIABILITY - 457(B) 326291 DUE FROM THE LATIN GRAMMY CULTURAL FOUNDATION 3091 DUE FROM GRAMMY MUSEUM FOUNDATION, INC. 2605176 MOVIE TICKETS 1929 21253763 OTHER RETIREMENT LIABILITY - 457(B) 326291 NON QUALIFIED PENSION LIABILITY 549139 875430 X PART V, LINE 4: THE INTENDED PURPOSE OF THE ENDOWMENT FUND IS TO EVENTUALLY USE ITS INVESTMENT INCOME TOWARDS OPERATIONS IN PROMOTION OF THE MISSION AND GROWTH OF THE RECORDING ACADEMY AS WELL AS PROVIDE OPERATIONAL SUPPORT IN CASE OF A CATASTROPHIC EVENT. PART X, LINE 2: THE RECORDING ACADEMY ACCOUNTS FOR INCOME TAXES IN ACCORDANCE WITH FINANCIAL ACCOUNTING STANDARDS BOARD (FASB) ACCOUNTING STANDARDS CODIFICATION (ASC) 740, INCOME TAXES. FASB ASC 740 PRESCRIBES A COMPREHENSIVE MODEL FOR HOW A COMPANY SHOULD RECOGNIZE, MEASURE, PRESENT, AND DISCLOSE IN ITS COMBINED FINANCIAL STATEMENTS UNCERTAIN TAX POSITIONS THAT THE COMPANY HAS TAKEN, OR EXPECTS TO TAKE, ON A TAX RETURN. DURING THE YEARS ENDED JULY 31, 2019 AND 2018, THE RECORDING ACADEMY DID NOT HAVE ANY LIABILITY FOR UNRECOGNIZED TAX BENEFITS. PART IX DUE FROM NARAS PROPERTIES, INC.: ON DECEMBER 21, 2016 NARAS PROPERTIES, INC. PURCHASED A RESIDENTIAL PROPERTY IN NEW YORK CITY, NEW YORK ON BEHALF OF THE RECORDING ACADEMY, A RELATED TAX-EXEMPT ORGANIZATION THAT IS THE CONTROLLING ENTITY OF NARAS PROPERTIES, INC., TO BE USED BY THE RECORDING ACADEMY AND ITS AFFILIATED TAX EXEMPT ORGANIZATIONS. THE PROPERTY IS IN THE PROCESS OF BEING PREPARED FOR COMMERCIAL USE. 1 GRAMMY MUSEUM FOUNDATION INC 800 WEST OLYMPIC BOULEVARD A245 LOS ANGELES CA 90015 261447714 501(C)(3) 4437973 24300 FMV GRAMMY AND OTHER EVENT TICKETS CONTRIBUTIONS AND PROGRAM SERVICE SUPPORT MUSICARES FOUNDATION INC 3030 OLYMPIC BOULEVARD SANTA MONICA CA 90404 954470909 501(C)(3) 3081248 289581 FMV GRAMMY AND OTHER EVENT TICKETS, AND RENT CONTRIBUTIONS AND PROGRAM SERVICE SUPPORT LATIN GRAMMY CULTURAL FOUNDATION INC 3470 NW 82ND AVENUE SUITE 700 MIAMI FL 33122 464770436 501(C)(3) 150000 FMV GENERAL SUPPORT SONGWRITERS HALL OF FAME 330 WEST 58TH STREET 411 NEW YORK NY 10019 237051690 501(C)(3) 28300 FMV GENERAL SUPPORT CITY OF HOPE 1500 EAST DUARTE ROAD DUARTE CA 91010 953435919 501(C)(3) 18650 FMV GENERAL SUPPORT MUSIC EDUCATION COALITION INC 202 WASHINGTON STREET SUITE 322 BROOKLINE NY 02445 814015913 501(C)(3) 50000 FMV GENERAL SUPPORT 6 0 SCHOLARSHIPS 6 30500 CASH VALUE PART I, LINE 2: CHAPTERS OF THE RECORDING ACADEMY MAKE DONATIONS TO VARIOUS CHARITABLE ORGANIZATIONS IN THEIR RESPECTIVE COMMUNITIES. THE CHAPTERS, EITHER THROUGH THEIR LOCAL CHARITABLE GIVING COMMITTEE OR LOCAL EXECUTIVE COMMITTEE, PUT FORTH A PROPOSAL FOR THE LOCAL CHAPTER BOARD TO APPROVE DONATIONS OF THEIR SPECIAL PROJECT FUNDS TO BE USED FOR THIS PURPOSE. THESE FUNDS ARE THE ACCUMULATION OF FUNDS BASED ON EVENTS HELD AT THE LOCAL LEVEL. THESE CHAPTER-APPROVED DISBURSEMENTS OVER $2,500 ARE THEN SENT TO THE NATIONAL FINANCE SUBCOMMITTEE FOR FINAL APPROVAL. A PRESENTATION IS MADE DISCLOSING INFORMATION ABOUT THE BENEFICIARY, ITS TAX-EXEMPT STATUS, THE NATURE OF THE USE OF THE FUNDS AND OTHER PERTINENT INFORMATION. THE FINANCE SUBCOMMITTEE APPROVES ALL DONATIONS OVER $2,500. THE NATIONAL HEADQUARTERS OF THE RECORDING ACADEMY SPONSORS VARIOUS CHARITIES IN THE COMMUNITIES IT SERVES THROUGH PURCHASES OF TABLES AT EVENTS AND/OR ADVERTISEMENTS IN PROGRAM BOOKS AND FROM TIME-TO-TIME MINIMAL CASH DONATIONS. THE RECORDING ACADEMY PROVIDES ASSISTANCE TO ITS AFFILIATED ENTITIES: MUSICARES FOUNDATION, INC., GRAMMY MUSEUM FOUNDATION, INC., AND LATIN GRAMMY CULTURAL FOUNDATION. X 1 1 X X X X X X 1 1 0 NEIL PORTNOW PRESIDENT/CEO 1122748 0 0 0 52224 0 118971 0 11636 0 1305579 0 0 0 DARYL FRIEDMAN CHIEF INDUSTRY, GOVT & MEM 424474 0 5250 0 24402 0 12000 0 22764 0 488890 0 0 0 BRANDEN CHAPMAN EXEC IN CHARGE PROD/CBDO 418257 0 5250 0 3810 0 9250 0 22689 0 459256 0 0 0 WAYNE ZAHNER CHIEF FINANCIAL OFFICER 384637 0 5250 0 3810 0 9250 0 14286 0 417233 0 0 0 EVAN GREENE CHIEF MARKETING OFFICER 342576 0 255250 0 3810 0 9250 0 33554 0 644440 0 0 0 WILLIAM FREIMUTH VP AWARDS 321752 0 5250 0 6822 0 12250 0 22689 0 368763 0 0 0 GAETANO FRIZZI CHIEF PEOPLE & CULTURE OFFICER 292251 0 5250 0 6822 0 12250 0 14277 0 330850 0 0 0 RICHARD ENGDAHL CHIEF INFORMATION OFFICER 289306 0 5250 0 5322 0 12250 0 11610 0 323738 0 0 0 NEDA AZARFAR VP MARKETING COMMUNICATION 220378 0 3500 0 36354 0 9250 0 7938 0 277420 0 0 0 LAURA SEGURA VP MEMBERSHIP & INDUSTRY RELATIONS 209488 0 5250 0 3428 0 9250 0 38370 0 265786 0 0 0 JASON JAMES CHIEF DIGITAL OFFICER 86845 0 0 0 190651 0 5116 0 20785 0 303397 0 0 0 PART I, LINE 1A THE RECORDING ACADEMY HAS A WRITTEN POLICY REGARDING THE CIRCUMSTANCES IN WHICH FIRST CLASS TRAVEL MAY BE USED. THE ORGANIZATION MAKES IT A PRACTICE TO ROUTINELY USE COACH OR BUSINESS CLASS AIRLINE TRAVEL. THE PRESIDENT/CEO AND ELECTED OFFICERS ARE PERMITTED TO FLY FIRST CLASS, ALTHOUGH THEY ARE ENCOURAGED TO FLY BUSINESS CLASS, WHEN AVAILABLE, PRIOR TO BOOKING IN FIRST CLASS. FURTHER, THESE INDIVIDUALS ARE ALSO ENCOURAGED TO USE COACH CLASS TRAVEL FOR VERY SHORT TRIPS. OTHER MEMBERS OF SENIOR MANAGEMENT (MANAGING DIRECTORS AND ABOVE) ARE ONLY ALLOWED TO FLY BUSINESS IF THE FLIGHT IS OVER TWO HOURS IN DURATION. IF BUSINESS CLASS IS NOT AVAILABLE FIRST CLASS MAY BE USED. THE MEMBERS OF THE BOARD OF TRUSTEES ARE OFFERED THE OPPORTUNITY TO FLY FIRST CLASS OR BUSINESS CLASS FOR THE IN-PERSON BOARD MEETINGS EACH YEAR. PART I, LINES 4A-B A) JASON JAMES RECEIVED A SEVERANCE PAYOUT OF $162,500. THIS WAS PAID OUT OVER 6 MONTHS. B)A NON-QUALIFIED DEFERRED COMPENSATION PLAN WAS ESTABLISHED EFFECTIVE AUGUST 1, 2013. MR. PORTNOW ACCRUED $106,737 THROUGH DECEMBER 31, 2018 UNDER THE PLAN, WHICH IS SUBJECT TO A SUBSTANTIAL RISK OF FORFEITURE. GEORGE FLANIGEN IV TRUSTEE OF ORG. 75000 PRODUCTION SERVICES 0 SCHEDULE L PART IV GEORGE FLANIGEN, IV IS A TRUSTEE AND A PRODUCTION CONSULTANT OF THE 61ST GRAMMY AWARDS. X BEVERAGES 7 118838 FMV X GIFT BAG ITEMS 4500 93059 FMV 0 0 0 0 FORM 990, PART V, LINE 6B: THE ORGANIZATION DOES NOT SOLICIT CONTRIBUTIONS FROM THE GENERAL PUBLIC, HOWEVER, THEY DO ACCEPT SPONSORSHIP INCOME FROM CORPORATE DONORS AS PART OF THEIR EVENTS. FORM 990, PART VI, SECTION A, LINE 1 THE EXECUTIVE COMMITTEE IS COMPRISED OF THE CHAIR OF THE BOARD OF TRUSTEES, VICE CHAIR OF THE BOARD OF TRUSTEES, SECRETARY/TREASURER OF THE BOARD OF TRUSTEES, CHAIR EMERITUS OF THE BOARD OF TRUSTEES AND FOUR (4) SITTING TRUSTEES SELECTED BY THE CHAIR OF THE BOARD OF TRUSTEES IN CONSULTATION WITH THE PRESIDENT/CHIEF EXECUTIVE OFFICER AND RATIFIED BY THE BOARD OF TRUSTEES. THEY ARE GRANTED UNILATERAL RIGHTS TO CONDUCT BUSINESS ON BEHALF OF THE BOARD OF TRUSTEES. ANY SUCH ACTION SHALL BE COMMUNICATED TO THE ENTIRE BOARD AS PROMPTLY AS THE EXECUTIVE COMMITTEE DEEMS REASONABLY PRACTICABLE. SUCH ACTIONS SHALL NOT INCLUDE: (A)ALTERING MAJOR LEGAL DOCUMENTS SUCH AS, BUT NOT LIMITED TO, THE CERTIFICATE OF INCORPORATION, BYLAWS, OR GOVERNANCE MANUAL; (B)AUTHORIZING MERGERS (OTHER THAN A MERGER OF ANY WHOLLY-OWNED SUBSIDIARY WITH THE RECORDING ACADEMY), ACQUISITIONS, JOINT VENTURES, CONSOLIDATIONS OR DISSOLUTIONS; OR APPROVING THE SALE, LEASE, EXCHANGE OR ENCUMBRANCE OF ANY MATERIAL ASSET OF THE RECORDING ACADEMY THAT IS NOT IN THE ORDINARY COURSE OF BUSINESS OF THE RECORDING ACADEMY; (C)FORMING OR DISSOLVING STANDING AND TRUSTEE-ONLY COMMITTEES OF THE BOARD, OR AMENDING THE CHARTER OF ANY COMMITTEE; (D)TAKING ANY ACTIONS THAT HAVE BEEN EXPRESSLY, BY CHARTER OR RESOLUTIONS, DELEGATED TO ANY OTHER TRUSTEE-ONLY COMMITTEE; AND (E)AMENDING OR REPEALING ANY RESOLUTION OF THE BOARD. FORM 990, PART VI, SECTION A, LINE 2 THE FOLLOWING PEOPLE HAD BUSINESS RELATIONSHIPS: RICHARD STUMPH AND TRACY GERSHON MATT STILL AND TAMMY HURT NICK PHILLIPS AND JOHN BURK MATT HENNESSY AND JUSTIN ROBERTS BRIAN DECK AND MATT HENNESSY BRIAN DECK AND MARK HUBBARD JOHN BURK AND MINDI ABAIR JOHN BURK AND BOOKER T. JONES JOHN BURK AND SHANNON SANDERS JOHN BURK AND PETER ASHER JOHN BURK AND KEN SHEPHERD JOHN BURK AND TERRI LYNE CARRINGTON JOHN BURK AND SCOTT BILLINGTON JOHN BURK AND HARVEY MASON JR JOHN BURK AND LALAH HATHAWAY HELEN BRUNER AND TERRY JONES FORM 990, PART VI, SECTION A, LINE 6 THERE ARE THREE CATEGORIES OF MEMBERS OF THE RECORDING ACADEMY: (A) VOTING MEMBERS; (B) ASSOCIATE MEMBERS; AND (C) GRAMMY UNIVERSITY MEMBERS. EACH MEMBERSHIP CLASS HAS ITS OWN RIGHTS AND ESTABLISHED CRITERIA FOR PARTICIPATION AS SET FORTH BY THE ORGANIZATION'S BYLAWS. FORM 990, PART VI, SECTION A, LINE 7A THE VOTING MEMBERS FROM EACH CHAPTER SHALL CONSTITUTE A SEPARATE MEMBERSHIP CLASS (THE "CHAPTER VOTING MEMBER MEMBERSHIP CLASS") AT THE TIME AND, AS SUCH, SHALL ELECT THE VOTING MEMBER GOVERNORS FROM SUCH CHAPTER BY A PLURALITY VOTE OF QUALIFIED RETURNED BALLOTS EQUAL TO NOT LESS THAN TEN PERCENT OF THE TOTAL NUMBER OF MEMBERS OF SUCH MEMBERSHIP CLASS. THE VOTING MEMBERS AND ASSOCIATE MEMBERS FROM EACH CHAPTER AT THE TIME SHALL CONSTITUTE A SEPARATE MEMBERSHIP CLASS (THE "CHAPTER VOTING MEMBER AND ASSOCIATE MEMBER MEMBERSHIP CLASS") AND, AS SUCH, SHALL ELECT THE ASSOCIATE MEMBER GOVERNORS FROM SUCH CHAPTER BY A PLURALITY VOTE OF QUALIFIED RETURN BALLOTS EQUAL TO NOT LESS THAN TEN PERCENT OF THE TOTAL NUMBER OF MEMBERS OF SUCH MEMBERSHIP CLASS. VOTING MEMBER GOVERNORS AND ASSOCIATE MEMBER GOVERNORS FROM EACH CHAPTER: THE MEMBERS FROM EACH CHAPTER WHO AT THE TIME ARE VOTING MEMBER GOVERNORS AND ASSOCIATE MEMBER GOVERNORS SHALL CONSTITUTE A SEPARATE MEMBERSHIP CLASS (THE "CHAPTER GOVERNOR MEMBERSHIP CLASS"). THE CHAPTER GOVERNOR MEMBERSHIP CLASS SHALL ELECT (A) THE TRUSTEES FROM SUCH CHAPTER BY A PLURALITY VOTE OF A MAJORITY OF THE MEMBERSHIP CLASS ELIGIBLE TO VOTE AND (B) THE CHAPTER OFFICERS OF SUCH CHAPTER BY A PLURALITY VOTE OF A MAJORITY OF THE MEMBERSHIP CLASS ELIGIBLE TO VOTE, AND SHALL HAVE THE POWER TO REMOVE SUCH PERSONS FROM OFFICE. TRUSTEES: THE MEMBERS WHO AT THE TIME ARE TRUSTEES SHALL CONSTITUTE A SEPARATE MEMBERSHIP CLASS (THE "TRUSTEE MEMBERSHIP CLASS"). DURING THE PERIOD A PERSON IS IN OFFICE AS A TRUSTEE OFFICER, SUCH PERSON WILL ALSO BE A TRUSTEE. THE TRUSTEE MEMBERSHIP CLASS SHALL (A) ELECT THE TRUSTEE OFFICERS BY A MAJORITY VOTE OF A SIMPLE QUORUM; (B) HAVE THE POWER, BY A SUPERMAJORITY VOTE OF A SUPERMAJORITY QUORUM, (I) TO REMOVE ANY TRUSTEE FROM OFFICE (II) TO REMOVE ANY TRUSTEE OFFICER FROM OFFICE AND (III) TO REMOVE ANY GOVERNOR FROM OFFICE; (C) HAVE THE POWER TO RATIFY THE COMMITTEE NOMINATIONS; AND (D) HAVE THE POWER TO APPROVE, ADOPT, VOTE ON, CONSENT WITH RESPECT TO, OR RATIFY SUCH MATTERS OR ACTIONS THAT THE CHAIR OR THE EXECUTIVE COMMITTEE DECIDES TO SUBMIT TO THE TRUSTEE MEMBERSHIP CLASS FOR SUCH ACTION. VOTING MEMBER GOVERNORS AND ASSOCIATE MEMBER GOVERNORS FROM ALL CHAPTERS: THE MEMBERS FROM ALL CHAPTERS WHO AT THE TIME ARE VOTING MEMBER GOVERNORS AND ASSOCIATE MEMBER GOVERNORS SHALL CONSTITUTE A SEPARATE MEMBERSHIP CLASS (THE "GOVERNOR MEMBERSHIP CLASS"). THE GOVERNOR MEMBERSHIP CLASS SHALL HAVE THE RIGHT TO VOTE ON ANY MAJOR CHAPTER MATTER, AND APPROVAL WILL REQUIRE A SUPERMAJORITY VOTE OF A SUPERMAJORITY QUORUM. FORM 990, PART VI, SECTION B, LINE 11B FORM 990 IS PREPARED BY DELOITTE TAX LLP, WORKING IN CONJUNCTION WITH THE ORGANIZATION'S FINANCE DEPARTMENT. THE DRAFT OF THE FORM 990 IS REVIEWED BY THE ORGANIZATION'S MANAGEMENT. THE INITIAL DRAFT OF THE FORM 990 IS THEN PROVIDED TO THE RECORDING ACADEMY'S AUDIT/FINANCE COMMITTEE FOR THEIR REVIEW. ANY COMMENTS RESULTING FROM THEIR REVIEW ARE INCORPORATED INTO THE FINAL FILING OF THE FORM 990. THE AUDIT/FINANCE COMMITTEE HAS BEEN AUTHORIZED BY THE BOARD OF TRUSTEES TO REVIEW THE TAX FILINGS AND APPROVE THEM TO BE FILED. FORM 990, PART VI, SECTION B, LINE 12C THE CORPORATE SECRETARY DISTRIBUTES THE STATEMENT OF CONFLICT OF INTEREST POLICY AT A TRUSTEES MEETING. THE STATEMENTS ARE COLLECTED BY THE CORPORATE SECRETARY AND THEN A SUMMARY REPORT IS GIVEN TO THE CHAIR OF THE BOARD OF TRUSTEES AND THE PRESIDENT/CHIEF EXECUTIVE OFFICER. ACCORDINGLY, THE CHAIR OF THE BOARD OF TRUSTEES AS WELL AS THE PRESIDENT/CHIEF EXECUTIVE OFFICER ARE RESPONSIBLE FOR BOTH MONITORING AND ENFORCING THE CONFLICT OF INTEREST POLICY BASED ON THE STATEMENTS THAT ARE PROVIDED. FORM 990, PART VI, SECTION B, LINE 15A THE PRESIDENT/CEO COMPENSATION WAS DETERMINED BY THE EXECUTIVE COMMITTEE OF THE BOARD OF TRUSTEES, FUNCTIONING AS A COMPENSATION COMMITTEE FOR THIS PURPOSE. THE DECISION WAS THEN RATIFIED BY THE BOARD OF TRUSTEES. THE COMMITTEE RELIED UPON THE ADVICE AND EXPERTISE OF LEGAL COUNSEL, AN INDEPENDENT OUTSIDE COMPENSATION CONSULTANT AND COMPARABILITY DATA IN DETERMINING THE COMPENSATION. THE MEETING IN WHICH THOSE DELIBERATIONS WERE CONDUCTED WAS CONTEMPORANEOUSLY DOCUMENTED. FORM 990, PART VI, SECTION B, LINE 15(B): COMPENSATION FOR OTHER EMPLOYEES OF NATIONAL ACADEMY OF RECORDING ARTS & SCIENCES, INC. IS SET BY THE PRESIDENT/CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER AND CHIEF HUMAN RESOURCES OFFICER. COMPENSATION IS DETERMINED BY THE REVIEW OF THE COMPENSATION OF OTHER EMPLOYEES AT SIMILAR LEVELS. INFORMATION FROM OUTSIDE ORGANIZATIONS IS GATHERED BY THE CHIEF HUMAN RESOURCES OFFICER AND BY A GENERAL KNOWLEDGE OF WHAT IS EXPECTED FOR THE POSITION BY THESE THREE INDIVIDUALS. AS IT RELATES TO ANNUAL INCREASES, THE CHIEF HUMAN RESOURCES OFFICER AND THE CHIEF FINANCIAL OFFICER HAVE DISCUSSED BENCHMARKING WITH HUMAN RESOURCES MANAGEMENT AND THE CHIEF FINANCIAL OFFICER OF SIMILAR ORGANIZATIONS. AGREEMENT IS OBTAINED BETWEEN THESE THREE INDIVIDUALS (CEO, CFO, CHIEF HUMAN RESOURCES OFFICER) AS TO THE VALUE OF SERVICES PROVIDED. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION MAKES THE BYLAWS AVAILABLE ON ITS WEBSITE. IT DOES NOT MAKE THE CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC. FORM 990, PART XII, LINE 2A & 2B THE ORGANIZATION'S FINANCIAL STATEMENTS WERE AUDITED AS PART OF THE COMBINED FINANCIAL STATEMENTS THAT INCLUDED NARAS PROPERTIES, INC. A RELATED TAX-EXEMPT ORGANIZATION. FORM 990, PART VIII AND IX DURING THE TAX YEAR, THE RECORDING ACADEMY RECEIVED DONATED SERVICES IN THE FORM OF PRINTED ADVERTISEMENTS. REVENUE FROM THESE DONATED SERVICES IS INCLUDED IN SPONSORSHIP INCOME ON FORM 990, PART VIII, LINE 2B. EXPENSES INCURRED ASSOCIATED WITH THE DONATED SERVICES ARE INCLUDED ON FORM 990, PART IX, LINE 12. IN ADDITION, THE FAIR MARKET VALUE OF THE PORTION OF THE DONATED SERVICES THAT WERE CONTRIBUTED TO OTHER ORGANIZATIONS IS INCLUDED IN FORM 990, PART IX, LINE 1 AND SCHEDULE R IF THE ORGANIZATION WAS ALSO A RELATED ORGANIZATION. TANGIBLE PROPERTY REGULATION ELECTIONS SECTION 1.263(A)-1(F) DE MINIMIS SAFE HARBOR ELECTION TAXPAYER IS MAKING THE DE MINIMIS SAFE HARBOR ELECTION UNDER TREAS. REG. 1.263(A)-1(F) FOR ALL ELIGIBLE AMOUNTS PAID OR INCURRED DURING THE TAXABLE YEAR. SECTION 1.263(A)-3(N) CAPITALIZATION ELECTION TAXPAYER HEREBY ELECTS TO CAPITALIZE REPAIR AND MAINTENANCE COSTS UNDER TREAS. REG. 1.263(A)-3(N). THE COSTS WERE INCURRED DURING THE TAXABLE YEAR IN THE ELECTING TAXPAYER'S TRADE OR BUSINESS AND THE ELECTING TAXPAYER TREATS SUCH COSTS AS CAPITAL EXPENDITURES ON ITS BOOKS AND RECORDS. NARAS PROPERTIES INC 3030 OLYMPIC BLVD SANTA MONICA CA 904045073 954516666 HOLD TITLE TO REAL PROPERTY CA 501(C)(2) NATIONAL ACADEMY OF RECORDING ARTS & SCIENCES INC 1 0 0 0 1 0 0 0 0 0 0 1 0 0 0 1 0 1 0 1 NARAS PROPERTIES INC D 977988 CASH VALUE NARAS PROPERTIES INC K 3862774 FMV NARAS PROPERTIES INC O 64327 CASH VALUE NARAS PROPERTIES INC S 3804399 FMV SCHEDULE R, PART V NARAS PROPERTIES, INC. A RELATED SECTION 501(C)(2) TAX-EXEMPT ORGANIZATION CONTROLLED BY THE RECORDING ACADEMY, OWNS THE CORPORATE HEADQUARTERS IN SANTA MONICA, CALIFORNIA USED BY THE RECORDING ACADEMY AND ITS AFFILIATED TAX-EXEMPT ORGANIZATIONS. THE RECORDING ACADEMY PAID RENT FOR ITS USE OF THE CORPORATE HEADQUARTERS. THE VALUE OF THE RENT WAS DETERMINED BASED ON COMPARABLES OF SIMILAR PROPERTIES. NARAS PROPERTIES, INC. ALSO OWNS AN OFFICE BUILDING IN NASHVILLE, TENNESSEE USED BY THE NASHVILLE CHAPTER OF THE RECORDING ACADEMY AND MUSICARES, ONE OF ITS AFFILIATED TAX-EXEMPT ORGANIZATIONS. THE RECORDING ACADEMY PAID RENT FOR ITS USE OF THE PROPERTY. THE VALUE OF THE RENT WAS DETERMINED BASED ON COMPARABLES OF SIMILAR PROPERTIES. VALUE OF DONATED ADVERTISING IS BASED ON RATE CARD FROM THE PUBLICATION. ON DECEMBER 21, 2016 NARAS PROPERTIES, INC. PURCHASED A RESIDENTIAL BUILDING IN NEW YORK CITY, NEW YORK. THE NEW YORK CHAPTERS OF THE RECORDING ACADEMY AND MUSICARES WILL UTILIZE THE PROPERTY ONCE RENOVATIONS ARE COMPLETE.