The Danbury Hospital

“Richard Jabara and James Kennedy, both directors of Danbury Hospital have a business relationship.”

“On 1/1/2014, Western Connecticut Health Network (WCHN) became the sole corporate member of Norwalk Health Services Corporation, and a corporate affiliation was completed.The following significant changes were made to the Certificate of Incorporation of Danbury Hospital (the Corporation), during the fiscal year ending September 30, 2014:Article 3:The Corporations sole member, Western Connecticut Health Network, Inc. (WCHN), will now have the ability to amend the Corporations bylaws without first obtaining a vote of the Corporations board of directors (the Board). By way of background, membership rights are delineated in this certificate and in the bylaws. Consistent with Connecticut law, the Board manages the affairs of the Corporation except to the extent that certain powers are reserved to WCHN. Please see Section 2.2 of the Bylaws for a full list of items requiring the consent of WCHN.Article 4:The revision to this article reflects that fact that the Corporations registered agent has been changed since the Corporation last amended and restated its certificate of incorporation.Article 10:This article will be changed to eliminate the express requirement that an indemnitee obtain permission of the Corporation prior to initiating a proceeding for which indemnification is sought.The following significant changes were made to the by laws of the Corporation, during the fiscal year ending September 30, 2014:Section 2.2:Revised the powers of the member company, WCHN in section 2.2 to add: -Approval of changes to qualified and non-qualified benefit plans -Approval of policies -Approval of quality, performance and credentialing standards -Approval of physician compensation methodology -Approval of transactions and unbudgeted expenditures in excess of $2.0 million -Approval of any increases to the operating or capital budget Section 2.2 was further amended to delete the requirement that WCHN approve procurement of insurance; appointment of auditors, legal counsel or consultants; managed care contracts; and filing of a certificate of need. Approval of a certificate of need is not leagally required and WCHN is required to approve any changes in clinical services. Certain other approvals will no only be needed if the amount involved meets a stated dollar threshold. This section is also being amended to delete the requirement that the Corporation's approval of an action must be accomplished before WCHN's approval of the same action. This change will facilitate approvals when meeting cannot be scheduled to allow the Corporation to meet prior to WCHN's meeting.Section 3.2:The revision to this section reduces the number of the Corporations directors who must also be serving as directors of WCHN. A majority overlap will no longer be required. Instead, at least two of the Corporations directors must also serve on the board of directors of WCHN, The Danbury Hospital and The Norwalk Hospital Association.Section 3.5:The revision to this section clarifies that WCHN may request regular meetings of the Board.Section 4.1:The revisions to this section clarify that (i) WCHNs committees act as advisory committees to the Board and (ii) that a director must serve as the chair of any committee appointed by the Board.Section 4.3:The revision to this section clarifies that the Governance Committee will develop candidates to be nominated by the Corporation for membership on the board of directors of WCHN. The Governance Committee will also develop nominees to serve as the chairs of the Corporations committees.Section 5.2:The revision to this section modifies the description of the Chairs duties to delete the requirement that the Chair lead the board of directors in setting the mission and strategic direction of the Corporation.Section 5.4 and 5.5:The revisions to these sections modify the officers of the Corporation. The Corporation will have a Chief Executive Officer, who shall be the President and CEO of WCHN, and a President, who shall be the same individual”

“Certain fundamental decisions to be undertaken by the Hospital require the approval of the Member.a)The actions listed below, taken for the Hospital or in its capacity voting as a shareholder or member of a subsidiary ("Danbury Subsidiary") shall not require approval by the Board and are reserved solely to the Member:-The amendment of the Hospital's bylaws;-The election or removal of a director;-Approval of investment policies;-Approval of the adoption of or amendment to any qualified or any non-qualified benefit plan;-Approval of the adoption of or any amendment to the policies and procedures governing a) indemnification of directors and officers of the Hospital or any Danbury Subsidiary; b) conflicts or dualities of interest; c) accounting and investment standards and practices and d) such other policies the Member may determine;-Approval of system-wide quality, performance and credentialing standards and procedures to which the Hospital or any Danbury Subsidiary is expected to adhere; and-Approval of regulatory compliance and methodology for physician compensation arrangements.The actions listed below, taken for the Hospital or in its capacity voting as a shareholder or member of a Danbury Subsidiary, which require approval of the Board, must also be approved by the Member:-The election and removal of a director of a Danbury Subsidiary;-The election of the officers of the Hospital;-Approval of all operating and capital budgets of the Hospital and Danbury Subsidiary;-Approval of any amendment or restatement of the Hospital's certificate of incorporation, bylaws, or operating agreement of any Danbury Subsidiary;-Approval of any sale, lease, exchange, or other disposition of all or substantially all the property or assets of the Hospital or any Danbury Subsidiary;-Approval of the creation of any corporation of which the Hospital or a Danbury Subsidiary is the sole or controlling member or sole or controlling shareholder; the merger or consolidation of the Hospital or any Danbury Subsidiary with another corporation;and the reorganization, liquidation or dissolution of the Hospital or any Danbury Subsidiary;-Approval of any loans by the Hospital or any Danbury Subsidiary,or the incurring of any indebtedness, secured or unsecured, which exceeds two million dollars ($2.0 million) or which has a term longer than one year;-Approval of unbudgeted expenditures in excess of two million dollars ($2.0 million) or any increase in any approved annual operating or capital budget.-Approval of any agreement or transaction of the Hospital or any Danbury Subsidary involving an amount greater than two million dollars ($2.0 million)with another individual or entity;-Approval of the affiliation of the Hospital or any Danbury Subsidiary with any other entity for the purposes of the joint conduct of business;-Creation of any committee which shall have the authority to act on behalf of the Board or on behalf of any Danbury Subsidiary;-Approval of any conveyance of, or the granting of mortgages or trusts on any real property assets of the Hospital or of any Danbury Subsidiary; and-Approval of any commencement, cessation, location, relocation or consolidation of significant clinical services provided by the Hospital or any Danbury Subsidary.”

“Steven Rosenberg, CFO, will review the 990 prior to it being sent to the IRS. A preliminary 990, is presented to the Audit Committee in June, who reviews it on behalf of the Board. E&Y is on hand to review the 990 with the Audit Committee and answer any questions. Prior to the 990 being filed with the IRS, the Board will receive a full and accurate copy on a secured website for their review.”

“The Organization's Process for Monitoring and Enforcing Conflicts of InterestThe Western Connecticut Health Network and its affiliates' (The Network)Conflict of Interest Policy provides that annually, its Representatives shall sign a statement affirming that they disclosed all potential conflicts, as documented in the Conflict of Interest Policy. In addition, General Counsel is part of the routine contracts review process and watches for potential conflicts with any of The Network's Representatives.Who Is Covered By the PolicyThe Network's Conflict of Interest Policy covers each director, officer and manager of The Network, also referred to as "Representatives". Level At Which Determinations of Whether There Is a Conflict In connection with any actual or possible conflict of interest, an interested person must disclose the facts of the conflict. The Compliance Officer and the Audit Committee review and evaluate each disclosure to determine if there is a conflict of interest. After presentation of a potential transaction or arrangement is made by an interested person, the remaining disinterested Board or Committee members shall decide if a conflict of interest exist. Level That Reviews and Determines What To Do If There Is a ConflictAfter exercising due diligence the full Board would determine what actions should be taken for all conflicts by Officers and Directors. Any conflicts occurring by a manager are reviewed by the Compliance Committee to determine what further action should be taken.Restrictions on The Conflicted PersonNo director having a conflict of interest on any matter shall vote on that matter or be counted in determining the quorum for the meeting at which the vote is taken, even when permitted by law. No Representative having a conflict of interest on any matter shall use his or her personal influence on the matter.If the Board of Directors, in its sole discretion, determines that any Representative has conflicts of interest sufficient in number and/or importance that the effectiveness of such individual on behalf of The Network may be significantly impaired, the Board may ask the individual to resign.”

“Compensation of CEO:In order to achieve its mission and its overall performance objectives, Western Connecticut Health Network, Inc. employs a performance-based total compensation program for its senior executives that is market competitive, compliant with regulatory guidelines, and representative of best practices. Eligible executives are generally direct reports of the CEO along with other executives designated by the CEO. To meet Western Connecticut Health Network Inc.'s total compensation objectives for executives, the following survey sources are used for comparison purposes: -Blend of national Confidential Source, IHS, and Hay Group points healthcare data (where data available), plus 15% geographic differential. Title match data cuts selected based on revenue size.-For Physician executives, surveys covering physician compensation in accredited medical schools (AAMC) are used in combination with proprietary surveys compiled by nationally known consulting firm, Sullivan Cotter and the Medical Group Management Association (MGMA).Western Connecticut Health Network, Inc. targets cash compensation at market competitive levels. Base salary plus short-term (annual) incentive awards (total cash) approximate market competitive levels for total cash compensation. Executive performance is expected to meet or exceed predetermined operational and financial metrics.Other factors, such as competitive market forces, job performance, unique qualifications, and/or individual job responsibilities are also considered in Western Connecticut Health Network, Inc's executive compensation decisions.Roles of the Committee on Governance and Key Executives in the Executive Compensation Process- The Committee on Governance in consultation with the CEO and the SVP HR selects the outside compensation consultants. The current consultant is the Hay Group, whose purpose is to provide a valid independent assessment of the relevent market rates and pay practices for healthcare executives, physician executives and for physicians in general.- The compensation consulting firm compiles appropriate market data, job evaluation and ranking information for all executives and physicians of the organization, excluding the CEO, and will supply this material to the CEO and SVP HR for review and agreement. Once the report is final, it will be supplied to the Committee on Governance for their consideration and acceptance.-The Committee on Governance determines the CEO's salary based on overall performance and market data supplied by the outside market consultant.The last executive compensation evaluation by an outside consultant was done in September, 2014.”

“Compensation for Other Officers and Key Employees:Compensation review and approval process is identical to the process for the CEO and executives noted in 15A above.”

“The information that has been posted on Danbury Hospital's website for 2013 includes:The most current audited financial statements.Also included is the Code of Business Ethics, Information about our Compliance Program, and a copy of our policy regarding Preventing of Fraud, Waste and Abuse.All governing documents required by law are made available upon request.The conflict of interest policy is available upon request.”

“Western Connecticut Health Network, Inc. is the sole member of Danbury Hospital.”

“The sole member shall be responsible for electing, at the annual meeting of the membership, the members of the Board of Directors of the Hospital to serve for three year terms and until their successors are elected and have qualified.”

“Neil Culligan, MD was not considered to be independent, since he received stipends during the year exceeding $10,000.”

“For those officers and top 5 employees, for which only 40 hours is noted to reflect paid hours, actual hours worked exceeded this amount.Note: All amounts in column F, of Part VII,"Estimated Amount of Other Compensation", represent benefits, and do not reflect any compensation for which the average amount of time worked can be reflected.”

“CAPTIVE UBI = -$99329”

“Change in equity interest of wchnic = $16685537”

“Change in investment of whnf = -$8561009”

“Equity transfer from bsi = $7618”

“Equity transfer to nmh-w/o of intercompany = -$10412946”

“Equity transfer to wchn-w/o of intercompany = -$35980803”

“Equity transfer to wcmg-w/o of intercompany = -$8448820”

“Although contributions are reflected on line #1 of page #1 on form 990,all fundraising expenses were incurred by the western connecticut health network foundation, inc..”