Laurel Health System

“Key employee Charlie Santangelo and board member Steve Johnson”

“both serve on the board of a related taxable organization.”

“The Laurel Health System (LHS) has one corporate member,”

“Susquehanna Health System.”

“Susquehanna Health System (SHS), EIN 23-2751183 may elect”

“or remove members of the governing body.”

“All the business and affairs of the Entity shall”

“be managed and controlled by the Board of”

“Directors, subject to the oversignt of the sole”

“member, Susquehanna Health System (SHS), of the”

“management and operation of the Entity, except that”

“the following powers are reserved exclusively to”

“the sole Member of the Entity, and no attempted”

“exercise of any such powers by anyone other than”

“the sole Member shall be valid of any force or”

“effect whatsoever. The sole Member shall exercise”

“its powers through its Board of Directors. The sole”

“Member shall have the exclusive authority to”

“exercise the following powers: A) to appoint or”

“elect the directors B) to appoint and remove the”

“President following consultation with the Entity”

“C) to approve the nominees for elected officers and”

“to return the list of approved nominees to the”

“governing bodies for election D) to remove, with”

“or without cause, any director or any elected”

“officer E) to amend the Governing Instruments and”

“to approve all amendments to the Governing”

“Instruments which are proposed for adoption F) to”

“approve the annual operating and capital budgets”

“G) to establish requirements for a unified budget”

“H) to approve the incurrence or issuance of debt proposed”

“by Entity and the encumbrance of any Entity assets to”

“secure any such incurred debt I) to incur debt (or to cause”

“debt to be incurred) on behalf of the Entity J) to require”

“contributions in cash or cash equivalents to support the”

“working capital needs or capital projects of any one or”

“more System Entities K) to require that any debt incurred”

“on a System-wide basis by or at the direction of SHS shall”

“be the joint and several obligation of each System Entity”

“L) to direct or approve any cash contributions or any”

“other capital contributions made by one System Entity to”

“another System Entity M) to allocate any financial”

“resources in such manner as SHS determines to be necessary”

“N) to approve the sale, transfer or other disposition of”

“Entity or Entity property unless it is made in the”

“ordinary course of business or involves assets with a fair”

“market value of less than one hundred thousand dollars”

“O) to direct the transfer of property from the Entity to”

“one or more other System Entities P) to approve of any”

“investment of assets by Entity not within the limits of”

“the System's approved investment policy Q) to establish”

“requirements for the approval of the acquisition,”

“purchase, sale, transfer, encumbrance, leasing,”

“construction or demolition of land or building outside”

“the ordinary course of business R) to approve any”

“decision with respect to the addition,”

“modification or discontinuance of any patient care”

“or diagnostic program or health care service S) to”

“approve of any change in licensure of Entity;”

“licensure of any Facility; certification,”

“registration, accreditation, permit, or related”

“approval of any activity T) to require Entity to”

“add, modify, relocate or discontinue any patient”

“care of diagnostic program or health care service”

“U) to approve or direct any merger, consolidation,”

“organization, reorganization, joint venture,”

“corporate division, sale, conversion, lease or”

“exchange of substantially all the assets,”

“dissolution, liquidation or any other modification”

“of corporate structure or affiliations affecting”

“the autonomy, governance, or operations, and the”

“creation or acquisition of any new affiliate by”

“Entity V) to dissolve or terminate the existence of”

“Entity and to determine the distribution of assets”

“upon such termination or dissolution W) to”

“coordinate managed care plans involving Entity,”

“including decisions concerning entry into or”

“renewal of any contract or agreement relating”

“thereto X) to develop and/or enter into key”

“strategic relationships on behalf of Entity Y) to”

“select any outside financial auditors, general legal”

“counsel or investment adivsors to provide services”

“on behalf of Entity.”

“A high-level overview of Forms 990 is presented to the parent”

“Board of Directors (Susquehanna Health System #23-2751183)”

“before filing and complete drafts of all returns are made available”

“to all Board members through the CEO's and CFO's offices.”

“Annually on the 1st day of January, Susquehanna Health System sends to all”

“directors, officers, management staff and contracted physicians”

“a questionnaire to be completed and returned by January 15.”

“A report is submitted tot he Board of Directors to notify them of any conflicts of interest disclosed.”

“On a bi-annual basis, an independent compensation consulting firm performs”

“an analysis of the leadership salary structure in relationship”

“to the labor market using data from four different salary”

“surveys. Their analysis is reviewed with the Governance”

“committee of the Board of Directors. The firm then outlines”

“its recommendations for the proposed executive salary structure”

“to the committee for their consideration and approval.”

“Governing documents, financial statements, and conflice of interest”

“policies are available upon request from the person listed as”

“possessor of the information on line 20.”

“Line 5 reconciliation: This line represents a 74,701 unrealized”

“gain in assets for the period.”

“Line 9 reconciliation: All endowment and reserve funds in the”

“amount of $10,589,015 were transferred to Laurel Health Foundation.”

“All 1099's were issued by Susquehanna Health System (EIN 23-2751183) for the”

“twelve months ended June 30, 2014. All expenses were then allocated back”

“to the related entities.”