Rockford Memorial Hospital

“Note that no compensation review was completed for the short period 1/1/15-6/30/15 for which this return is being filed. Compensation for executives, including the top management official, is governed by the rhs board of directors. The rhs board has established a total compensation philosophy that directs the compensation practices for all executives. This board has established a compensation committee to establish and review all executive compensation annually based on the established philosophy. An external executive compensation firm provides consulting on rhs salary ranges and compensation philosophy. The appropriate peer group for compensation comparison purposes is other not-for-profit healthcare systems similar in size and complexity. Rhs generally conducts an analysis of total compensation every three years but may choose to vary from this schedule as determined by the compensation committee.”

“Note that no compensation review was completed for the short period 1/1/15-6/30/15 for which this return is being filed. Compensation for executives, including other officers and key employees, is governed by the rhs board of directors. The rhs board has established a total compensation philosophy that directs the compensation practices for all executives. This board has established a compensation committee to establish and review all executive compensation annually based on the established philosophy. An external executive compensation firm provides consulting on rhs salary ranges and compensation philosophy. The appropriate peer group for compensation comparison purposes is other not-for-profit healthcare systems similar in size and complexity.”

“The voting members of the RHS Executive Committee consists of seven individuals, each of whom shall have a vote, including: the RHS CEO, the chairman, vice-chairman, immediate past chairman, treasurer, and 2 additional directors of the board. At least one member of the Executive Committee shall be a physician. The Executive Committee shall in all instances be comprised of at least 51% community members. In the event that one or more of the aforementioned voting members of the Executive Committee is unable to serve in such capacity, then the chairman of the corporation shall designate a replacement from among the board members. The Executive Committee Shall meet as needed. The executive committee shall review reports from the RHS CEO regarding the performance of executives of the corporation and affiliated corporations, monitor the performance of the RHS CEO of the corporation against annual objectives, and determine the compensation level of the RHS CEO. In addition, when the board of directors is not in session, the executive committee shall have all the powers, duties, responsibilities and authority of the board, except as prohibited by law.”

“Rockford Health System (RHS) is the sole member. RHS's rights are as follows: (a) Appoint all the directors of the corporation. (b) Nominate to the corporation's board of directors all candidates for selection as the corporation's president. (c) Approve expressly all amendments to the corporation's articles of incorporation and by-laws. (d) Approve annual budgets, and strategic, long-range and health manpower development plans of the corporation. (e) Require the corporation's board of directors to take any action (including authorizing the pledge or transfer of assets to RHS or as directed by RHS, or the execution of contracts) which would improve the credit worthiness or otherwise result in financial benefit to RHS and its tax-exempt Affiliated Corporations (provided that under no circumstances may RHS require transfer of assets in violation of law or the terms of any charitable trust or donation). (f) Approve all contracts of indebtedness effective for longer than eighteen months. (g) Approve all plans of merger or consolidation. (h) Approve the sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all, the property and assets of the corporation. (i) Approve a voluntary dissolution of the corporation. (j) Approve material amendments to the corporation's standard form of physician employment agreement, provided, the corporation shall have the authority to negotiate the terms and conditions of individual physician employment agreements so long as the negotiated terms and conditions are consistent with the requirements of applicable law and the strategic, long-range and health manpower development plans approved by RHS. (k) Approve material amendments to the standard compensation system used by the corporation to establish individual physician compensation; and (l) Require the corporation's board of directors to take any action (including amending the corporation's articles of incorporation or by-laws), or to modify or rescind an action already taken, if the member determines that failure to take the action, or to modify or rescind an action already taken, may result in the corporation's failure to obtain or maintain its exemption as an organization described in Section 501(c)(3) of the Code;”

“See narrative for form 990, part vi, line 6.”

“See narrative for form 990, part vi, line 6.”

“The data was gathered by the accounting staff with input from the executive staff. The data was reviewed and the Form 990 prepared by the RHS staff. Once the Form 990 was completed, it was reviewed by an independent accounting firm and the organization's CFO.”

“By written policy, RHS sends out, on an annual basis, the corporate Conflict and Duality of Interest policy to all Board members, corporate officers and other key individuals (those having responsibility and authority to make final decisions regarding the acquisition of products or services). Each recipient is required to complete a Financial Interest Disclosure Statement, which is submitted to the Vice President, Legal Services/General Counsel for review. With respect to physicians and managers who are key individuals, any potential conflict of interest is reviewed with the appropriate executive staff member for follow up with the disclosing party in order to review the matter in more detail. This includes emphasizing that the disclosing party is not permitted to participate in any negotiations for the purchase of any products or services where the conflict is deemed material, or authorize the subsequent purchase of related goods and services. The disclosing party is also required to identify each and every instance of a potential conflict as they may arise in the ordinary course of business. A similar process is followed for the Board of Directors, except that any potential conflict is reviewed by the Board's Governance Committee. Board members may comment on transactions where there is a potential conflict, but cannot vote on the related matter and may be required to leave any meeting where the potential conflict is reviewed by the Board or where the Board takes action to either approve or not approve the proposed transaction. A board member also has a continuing duty to report any conflicts as they may arise in the ordinary course of business. In the event that a potential conflict of interest is reported or discovered outside the established process, appropriate review and action would be taken. This process was last completed in 2015, when the questionnaires were sent to address any 2014 conflicts identified. RHS and RMH have the same board, and therefore the RHS questionnaire is used to also address potential and actual conflicts for the filing organization. The RHS Conflict of Interest Policy is available upon request.”

“Financial statements are available through the Illinois Attorney General's Office. Governing documents are available by request from the board secretary. The conflict of interest policy is not published but is available upon request.”

“(Expenses $ 247,403 including grants of $ 0)(Revenue $ 159,367) THROUGH ROCKFORD MEMORIAL HOSPITAL AUXILIARY, RMH IS ABLE TO PROVIDE EXTRA FUNDS AND SERVICES TO SUPPORT ITS MISSION. THE AUXILIARY HAS 304 VOLUNTEERS WHO LOGGED NEARLY 15,000 HOURS WHILE ASSISTING WITH GREETING VISITORS, TRANSPORTING PATIENTS, FLORAL OR GIFT DELIVERIES, THRIFT SHOP AND GIFT SHOP ACTIVITIES, AND OTHER SERVICES AS REQUESTED. THE VOLUNTEERS' EFFORTS PROVIDE EXTRA FUNDS AND ENHANCE THE OVERALL HOSPITAL EXPERIENCE FOR PATIENTS, VISITORS AND STAFF.”

“The organization is filing for a short year for the period 1/1/15-6/30/15; as such, no calendar year ended within its tax year. Therefore, in accordance with the instructions, the organization has reported zero on this line.”

“The organization is filing for a short year for the period 1/1/15-6/30/15; as such, no calendar year ended within its tax year. Therefore, in accordance with the instructions, the organization has reported zero on this line.”

“Pension-Related changes other than net periodic pension cost - 2890932; Post-retirement medical benefit-related changes other than net periodic post-retirement cost - 959649; Net assets released from restrictions used for capital - 19705; Transfer to/from affiliates - -21493148; UPMIFA - 34419; Net change in beneficial interest in trust - 31748;”