Chesapeake Hospital Corporation

“Bon Secours Health System, Inc. is the sole member of Bon Secours Richmond LLC. Bon Secours Richmond LLC holds the majority interest in Bon Secours - Richmond Health System, which in turn is the sole member of the filing organization.”

“The governing body of the filing organization is appointed by its member Bon Secours - Richmond Health System and subject to approval by Bon Secours Health System, Inc.”

“Certain authorities of the filing organization are reserved to its member or to Bon Secours Health System, Inc.”

“The process the organization uses to review the Form 990 consists of a review by management and the local system's audit and compliance committee which is comprised of members of the governing body. Both groups are able to review, ask questions and suggest changes as applicable prior to filing the return.”

“The organization regularly and consistently monitors compliance with the conflict of interest policy. On an annual basis, all persons subject to the policy, including all officers, directors and key employees are required to make certain disclosures. These include disclosures related to certain personal, financial and organizational relationships that may present a conflict, or the appearance of a conflict of interest with the organization. All disclosures go through a three-part review process: (1) disclosures are reviewed first by the corporate responsibility officer (CRO); (2) a governance team comprised of the CEO, board president, board chair, CRO, and the BSHSI CRO participate in a second review of all disclosures during which recommendations are made as to the resolution of any conflicts or potential conflicts. Depending on the facts and circumstances, resolutions may include ongoing disclosure, recusal or removal of the conflict; and (3) all disclosures and recommendations are reviewed by a board committee (audit and compliance committee reviews the disclosures of management and the governance committee reviews the disclosures of the board and board committee members).”

“The compensation committee of the board of Bon Secours Health System, Inc. (BSHSI) engages in a comprehensive process for the oversight and management of remuneration for executive employees and disqualified parties of the BSHSI. The compensation committee consists of a group of independent board members and engages an independent external compensation consultant to ensure they receive appropriate analysis of market and follow the practices necessary to obtain full compliance with the IRS' rebuttable presumption of reasonableness. The committee establishes and maintains a compensation philosophy; reviews pay practices against local, regional and national healthcare organizations and approves all remunerative decisions for this group of individuals. The committee reviews and receives assurances that all levels of pay within the organization are reasonable based on performance and validates incentives are met. These decisions are documented in the BSHSI board of director's and compensation committee minutes. Form 990, Part VI, Section B, Line 15b: Compensation Process Other Officers/Key Employees: For those key employees and highest paid employees that are not reviewed by the BSHSI compensation committee, the process included a review and approval by independent persons, comparability data, and contemporaneous substantiation of the deliberation and decision. In the review, the other officers or key employees of the organization were compared to other hospitals' employees in the area that hold the same title. During the review and approval of the compensation, documentation of the decision was recorded in human resources.”

“The filing organization makes all documents available to the general public upon request.”

“The activities of the filing organization are included in the consolidated audited financial statements of its corporate parent organization, Bon Secours Health System, Inc.(BSHSI). The tax year covered for this 2015 return is the year ended on March 31, 2016 whereas the fiscal year covered by BSHSI is for the year ended August 31, 2016. The activities of the filing organization are covered by the consolidated audits of BSHSI's FY15 and FY16 audits.”

“Net Assets Released from Restriction 37,069. Transfer to/from Affiliates related to Acquisition -5,213,732.”