Exeter Hospital Inc.

“Exeter Health Resources, Inc., a charitable organization acting through its Board of Trustees, is the sole member of the organization.”

“The Board of Trustees shall consist of a number not to exceed fifteen (15) persons. Of this number, up to thirteen (13) persons shall have been elected by the Member from among the elected members of the Board of Trustees of the Member.”

“The sole member, Exeter Health Resources, Inc. has the right to approve decisions of the governing body. Additionally, the Member shall have the power to change the corporate name, merge with or acquire any corporation organized under Chapter 292 of the Revised Statutes Annotated of New Hampshire, amend the articles of agreement, dissolve the Corporation, annually appoint an independent certified public accountant to perform an audit of the accounts of the Corporation, and such other powers and rights as may be reserved to it by law or the articles of agreement.”

“The Form 990 is prepared by an outside tax accountant with information provided by the organization. The Form 990 is reviewed by the organization's Treasurer, then presented to the Board of Trustees before it is filed with the IRS.”

“The Board of Trustees has adopted a Conflict of Interest Policy that requires the disclosure of conflicts of interest either when the interest becomes a matter of possible action by the Board or during an annual disclosure process. Trustees, officers, and key employees, as well as all members of senior management, are part of the annual disclosure process, which is initiated by the issuance of a memorandum and accompanying questionnaire by the President and Chief Executive Officer (CEO). All disclosures are reviewed. Any trustee with a conflict of interest is required to abstain from voting and is not included in a quorum determination on the matter and any officer, key employee, or member of senior management with a conflict does not take part in making and is not present for any decision regarding the matter. The policy is monitored and enforced by both the President and CEO and the full Board. There are two additional conflicts of interest policies. One is applicable to all employees and contracted staff and the other is applicable to members of the Medical Staff and allied health professionals. The former policy is monitored and enforced by the Vice President of Human Resources and the Vice President of Corporate Integrity and Compliance and the latter is monitored and enforced by the President of the Medical Staff, President and CEO, General Counsel, and Compliance Officer. On an annual basis, staff within Human Resources survey all employees and contracted staff serving in a managerial role, as well as members of any committees that make recommendations or decisions regarding the purchase of goods or services by any of the corporations as a means to ensure that any conflict of interest is disclosed and appropriately managed. Employees otherwise are required to supplement or make any further written disclosure at the time a conflict arises.”

“The organization's parent (Exeter Health Resources, Inc.) has a formal process for determining total compensation for the CEO and other listed officers that is intended to provide reasonable compensation for achieving the organization's mission, to recognize individual and team performance and to comply with the organization's obligations as a tax-exempt charitable organization. The Executive Committee of the Exeter Health Resources, Inc.'s Board of Trustees conducts an annual review of the compensation of the CEO, other listed officers and key employees. In doing so, the Committee retains a qualified independent compensation consultant to conduct competitive market analysis of the market ranges of base, incentive, and total cash compensation, and to provide advice concerning the reasonableness of the compensation of the CEO, other listed officers and key employees. The Committee utilizes that analysis and other appropriate information in connection with its annual review and makes recommendations to the full board of Exeter Health Resources, Inc. for adjustment of the CEO's compensation and the compensation for other listed officers. Information which the committee may consider can include but is not limited to the performance of an individual and/or that individual's contributions to a team, the performance of the organization in whole and in part, the elements of total compensation and salary history, the organization's compensation targets and comparability data, including the data prepared by the independent consultant and reviewed with the Committee. The Committee incorporates a performance appraisal process in the CEO's, other listed officers and key employees' compensation review. The CEO, other listed officers and key employees are not present when the committee discusses their respective compensation. In addition, the committee determines if the threshold requirements for incentive awards are met, consisting of the organization's performance results for quality, operating system excellence and financial performance. The results of the Committee's deliberations are presented to the Exeter Health Resources, Inc. Board and include recommendations concerning salary range adjustments and incentive awards and the basis for the Committee's decisions/recommendations. The deliberations of the Exeter Health Resources, Inc. Board are conducted in executive session with the independent members of the Board but do include the CEO only for that period of time in which the Exeter Health Resources, Inc. Board has questions concerning the performance of any listed officer or key employee other than the CEO. The Exeter Health Resources, Inc. Board reviews the CEO's performance and determines if the adjustments and awards recommended by the committee for the CEO are in the organization's best interest and for the benefit of the organization and its parent organization. For the other listed officer positions, adjustments and incentive awards are approved upon recommendation of the CEO by the Executive Committee within the Exeter Health Resources, Inc. Board approved parameters and ratified by the Exeter Health Resources, Inc. Board of Trustees. Adjustments and awards for other listed key employees are approved upon recommendation of the CEO by the Executive Committee within the Exeter Health Resources, Inc. Board approved parameters and reviewed by the Board.”

“These documents are available upon request.”

“Although written policies were not in place as of the end of the year covered by this tax return requiring the organization to evaluate its participation in joint venture arrangements under applicable federal law to ensure that the organization's exempt status is protected, the organization performed due diligence with respect to its joint venture arrangements to safeguard the organization's exempt status. The organization is considering adopting formal written policies by the end of the next fiscal year.”

“Payment to Affiliate: Program service expenses 3,421,114. Management and general expenses 511,201. Fundraising expenses 0. Total expenses 3,932,315. Physician Fees: Program service expenses 6,159,951. Management and general expenses 920,453. Fundraising expenses 0. Total expenses 7,080,404. Contracted Services: Program service expenses 3,014,534. Management and general expenses 450,448. Fundraising expenses 0. Total expenses 3,464,982. Outside Fees: Program service expenses 2,481,652. Management and general expenses 370,821. Fundraising expenses 0. Total expenses 2,852,473. Contract/Temporary Labor: Program service expenses 1,452,687. Management and general expenses 217,068. Fundraising expenses 0. Total expenses 1,669,755. Consulting: Program service expenses 600,692. Management and general expenses 89,759. Fundraising expenses 0. Total expenses 690,451.”

“Net Transfers to Affiliates -17,786,072. Pension Liability Adjustment -9,715,038. Impact of Interest Rate Swaps -3,193,416. Net Assets Released from Restriction 6,898.”

“The organization is part of the consolidated operations of Exeter Health Resources, Inc. The Exeter Health Resources, Inc. Executive Committee is responsible for the oversight of the audit and the selection of an independent accountant. The audit process has not changed since the prior year.”