Whitley Memorial Hospital Inc.

“The organization is organized as a not-for-profit corporation. Pursuant to the organization's governing documents, parkview health system, inc. Ein 35-1972384 is the sole member of whitley memorial hospital, inc. With certain reserved powers.”

“The corporate member, parkview health system, inc. Ein 35-1972384, shall have the following reserved powers as defined in the network agreement: (a) appoint directors (including appointments to fill a vacancy) and initiate the removal and remove any director of the corporation, with cause, provided consideration is given to recommendations of the board regarding such appointment or removal, if any are so made; (b) appoint (including appointments to fill a vacancy) and initiate the removal and remove the chief operating officer of the corporation, with or without cause, provided consideration is given to recommendations of the board regarding such appointment or removal, if any are so made; (c) approve and adopt the strategic plan for the corporation and its affiliates, including any individual initiatives or arrangements, such as a new service or contractual arrangement, deemed by the corporate member to be of strategic importance to the corporation and direct and monitor compliance with such plans, initiatives and arrangements; (d) approve and adopt the capital and operating budgets of the corporation and its affiliates; (e) approve the incurrence of any debt proposed by the corporation, including the issuance of bonds, by the corporation and its affiliates and require the incurrence of debt by the corporation and its affiliates; (f) approve those transfers of assets by the corporation and its affiliates, including transfers of real property, personal property, cash, stock or other tangible or intangible assets, unless otherwise identified in previously approved strategic plans, initiatives, arrangements, or budgets; (g) require and direct the transfer of assets by the corporation or its affiliates, provided that approval of the board is also required if the transfer involves a transfer or sale of substantially all of the assets of the corporation or would prevent the corporation from operating an acute care hospital in the community. Further, the corporate member covenants not to direct the transfer of the corporation's real estate and improvements transferred to the corporation pursuant to, or otherwise covered by, the joint action of the board of directors of the parkview whitley hospital, the whitley county commissioners, and the whitley county council without the consent of the corporation's board and the county commissioners. For purposes of this section, board approval shall not be required for participation in a master trust indenture, pooled financing or any other kind of debt instrument, borrowing or guaranty obligating corporation assets; (h) approve participation (including the exercise of renewal options) by the corporation and its affiliates in networks, affiliations, joint ventures, partnerships, mergers or acquisitions and require participation by the corporation and its affiliates in such arrangements; (i) approve decisions of the corporation and its affiliates to participate (including the exercise of renewal options) in managed care or other health care service purchasing arrangements and required participation by the corporation and its affiliates in such health care service purchasing arrangements; (j) develop and require adoption of minimum medical staff quality assurance and utilization review standards, criteria and procedures for the corporation and its affiliates in consultation with the corporation; (k) approve any action of the corporation or an affiliate to change the hospital from a general, acute care community hospital or to close the hospital; and (l) approve any amendment to the bylaws or the articles of incorporation of the corporation, and the article and bylaws of any newly created affiliate and require amendment of these governing documents as necessary or advisable to resolve significant ethical issues; to maintain jcaho accreditation, tax-exempt status, participation in medicare/medicaid or to prevent significant adverse legal or financial effects to the corporation or system, except th”

“See schedule o explanation for form 990, part vi, section a, line 7a”

“Pursuant to parkview health system inc.'s bylaws, the system audit committee may act on behalf of the corporation to provide review of the corporation and its subsidiary corporations' form 990 filings. Whitley memorial hospital, inc. Is a subsidiary corporation of parkview health system, inc. An electronic copy of the organization's final form 990 (including supplemental schedules) was provided to each voting member of the organization's governing body and the system audit committee, prior to filing with the irs. On october 8, 2014, the system audit committee reviewed the form 990 as ultimately filed with the irs. This review included a presentation by the organization's tax preparer to highlight the significant areas on the form 990 and supplemental schedules.”

“As described in article ix section 6, of the parkview health system, inc. (ph) bylaws, ph adopted ph's compliance policy for the organization and its not-for-profit related organizations (and as likewise noted in their bylaws) when addressing conflicts or potential conflicts of interest. This compliance policy (compliance policy #14) requires that each board member, board committee member, and key management personnel must annually complete a conflict of interest form. This information is provided to the chairman of the board (for board and board committee members) and to senior management (for key management personnel). In addition, as to the conduct of board meetings, the following process is followed: "whenever a ph or ph affiliate board or board committee is considering a transaction or arrangement with an organization, entity or individual in which a person covered by this policy has a financial or conflicting interest, the following shall occur: 1. The interested person must disclose the financial or conflicting interest and all material facts to the ph or ph affiliate board or board committee; 2. The interested person with that financial or conflicting interest may make a presentation at the board or board committee meeting regarding the transaction or arrangement however, he/she shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement that results in the financial or conflicting interest; and 3. The ph or ph affiliate board or board committee must approve the transaction or arrangement by a majority vote of the board members present at a meeting that has a quorum, not including the vote of the interested person. The interested person may not vote on the matter. A. Upon the request of ph or ph affiliate board or board committee, the matter may be delegated to the ph compliance committee for evaluation, recommendation and/or determination. 4. Whenever a financial or conflicting interest is addressed by a ph or ph affiliate board, notice shall be given to the ph compliance officer / general counsel."”

“Regarding lines 15a and 15b, to the extent that the organization has vice president or above, the organization used a process for determining compensation of the ceo, officers, and key employees. The process includes consultations with an independent compensation advisor; review, and approval by the governing body; and contemporaneous documentation and recordkeeping with respect to deliberations and decisions regarding the compensation arrangements. In 2013, the board of parkview health system, inc. Reviewed and approved all executive compensation, benefits and perquisites for the 2013 compensation package, pursuant to the parkview health bylaws. The compensation package was approved by a majority of independent board members. Parkview's independent consultant prepares a competitive compensation analysis using data from multiple published surveys prepared by independent firms for positions that are functionally comparable in similar-sized health systems and hospital organizations on both a regional and national basis. The independent consultant provides a statement of reasonableness of the compensation provided to the ceo as well as all executives at the vice president level and above. All data is shared with the board of directors. The board approves any changes in compensation for the ceo and his direct reports. Approval is also provided for the merit budget for the entire organization. The board reviews and approves the management incentive compensation plan (micp). Offices or positions reviewed at the 2013 meeting: president and chief executive officer president parkview regional medical center (prmc) and affiliates president community hospital physician executive officer parkview physicians group senior vice president chief financial officer senior vice president chief information officer senior vice president coo parkview health senior vice president coo parkview physicians group senior vice president coo service line leader senior vice president delivery system integration senior vice president facility design and oversight senior vice president general counsel senior vice president human resources senior vice president patient care senior vice president service line leader senior vice president strategic initiatives vice president changing spaces construction project management vice president human resources vice president mktg/comm/community relations vice president nursing prmc vice president nursing randallia vice president parkview physicians group finance vice president parkview physicians group physician practices vice president patient care services community hospital vice president planning and decision support vice president randallia operations vice president revenue cycle management vice president strategy and business development vice president supply chain vice president surgical and ancillary services prmc and affiliates medical director community hospital medical director health plan services medical director parkview physicians group medical director integration and development chief medical informatics officer chief medical officer prmc and affiliates executive director employer strategies”

“Copies of the organization's governing documents, conflict of interest policy, and financial statements are available upon request.”

“Parkview health system, inc. (ph), ein 35-1972384, is the common paying agent for the filing organization, whitley memorial hospital, inc., ein 35-1967665. Therefore, all applicable irs tax filings, including forms 1099, 1096, w-2 and w-3 are reported and filed by ph. The total number reported in box 3 of form 1096 and filed by the common paying agent, ph, for the year ended december 31, 2013 was 969. The total number of employees reported on form w-3 and filed by the common paying agent, ph, for the year ended december 31, 2013 was 9,926. For purposes of completing form 990, part v, line 1a and 2a, the number reported for the whitley memorial hospital, inc. Was 30 and 426 respectively. As reflected in part vii, section b, one independent contractor received more than $100,000 in compensation for services from whitley memorial hospital, inc.”

“Parkview health system, inc., ein 35-1972384, serves as the common paying agent for all tax-exempt organizations of the system. Salaries and wages of employees working for these organizations are charged directly to the organizations in which they work. The actual expenses for payroll taxes, employee benefits, and pension plan contributions are reflected on the books of parkview health system, inc. For financial reporting purposes. To account for benefit costs on the books of the other tax exempt organizations, an allocation methodology is utilized to charge these organizations with an estimate of the overall costs, referred to as a "benefit allocation" from parkview health system, inc. The allocation does not distinguish between the costs of the various components (i.e. Payroll taxes, employee benefits, and pension plan contributions). Therefore, for purposes of the form 990, part ix, the total benefit allocation for the employees' salaries and wages reported on line 7 is reflected on line 9 and not allocated between lines 8 or 10. For purposes of the form 990, part ix, lines 5 and 6 reflect compensation and benefit amounts reported in part vii.”

“Asset adjustments/transfers -20,771. Current year earnings transferred to parent -7,240,636.”