Centegra Health System

“Centegra Health System (CHS) has adopted specific conflict of interest policies for its governing and management staff. The policy includes, but is not limited to, when an individual, governor, committee member, officer, agent or employee believes that he or she, or a member of his or her immediate family might have or does have a real or apparent conflict, he or she should in addition to filing the disclosure notice required, abstain from making motions, voting, executing agreements, or taking any other similar direct action on behalf of CHS. It is understood, however, that both real and apparent conflicts of interest sometimes naturally occur in the course of conducting daily affairs. Conflicts occur because the many persons associated with CHS should be expected to have, and do in fact generally have multiple interests and affiliations, and various positions of responsibility within the community. The long-range interests of CHS do not require the termination of an association with persons who have real or apparent conflicts, if an effective method can render such conflicts harmless to all concerned. During fiscal year 2015, CHS and its affiliates purchased certain goods, and or services, from organizations with directors affiliations. All transactions were competitively bid and conducted at arms- length. The fees paid were at fair market value. During fiscal year 2015, Director Michael Curran is an officer/director of Curran Contracting Company. Director Kathy Powell was a Vice President of Home State Bank. Director Patrick Morehead is on the Board of Directors and a 2% owner of Home State Bank. Director Charie Zanck is the CEO and Chairman of American Community Bank & Trust. Director Charles Ruth is the Board Chairman of American Community Bank & Trust and president of alliance contractors. Director Tom Carey is Vice-President, Carey Electric Contracting, Inc. Director Chris Newkirk is a shareholder of American Community Bank & Trust. Rachel Sebastian, Senior Vice President and Chief Operating Officer for Centegra Hospital - McHenry, is the daughter of Chief Executive Officer, Michael Eesley. Rachel Sebastian reports directly to the President and Chief Operating Officer, Jason Sciarro.”

“The powers and duties of the Centegra Health System (CHS) members in fulfilling the purposes and objectives of the Corporation shall include, but not be limited to, the taking of action with respect to the following matters: The election of governors and the filling of vacancies on the Board of Governors, which shall be in accordance with the procedures set forth in the Bylaws. The Nominating Committee shall select one candidate for each position on the Board having a term to be voted upon for the office of governor at the next annual meeting of members. The Nominating Committee shall consider and approve a list of candidates and submit such list to the Board of Governors not less than 10 days prior to the date of the last meeting of the Board of Governors prior to the date on which notice of the annual meeting of members is to be sent, and the candidates set forth on such list shall be subject to approval by the Board of Governors. The names of the candidates so selected by the Nominating Committee and approved by the members of the Corporation and shall be presented to the members of the Corporation at the annual meeting. The voting members of the Corporation may nominate candidates for positions on the Board of Governors. Nominations by such members may be effected by means of written nomination signed by not less than 20 voting members in good standing, accompanied by a written statement of such nominee indicating a willingness to serve as a governor of the Corporation if elected. Any such nomination must be received by the Nominating Committee of the Corporation not less than 60 days prior to the annual meeting of members in order to be considered at such annual meeting. All elections shall be by secret ballot if there are more nominees than vacancies to be filled on the Board. All voting members present in person or by proxy at a meeting at which an election occurs shall be entitled to vote for governors. To be valid a ballot must not have more votes than there are vacancies. If there are more nominees than vacancies to be filled on the Board, those nominees who receive the most votes shall be elected to the Board of Governors. Members shall not be entitled to cumulate their votes in the election of governors.”

“The review process for the Form 990 includes compilation by internal staff, detailed review by an outside tax preparer, bond counsel, and the Centegra Health System (CHS) Controller and Chief Financial Officer, prior to submission to the IRS. The tax return will be made available for the Board to review after submission to the IRS.”

“1. In connection with any actual or possible conflicts of interest, an interested person or other person subject to this policy must disclose the existence and nature of his or her financial interest in writing to the President of Centegra or the Chief Compliance Officer or designee, who shall provide such written disclosure to the Governors Affairs Committee of Centegra, which shall consider all conflicts of interest issues and, if appropriate, to the directors and members of committees with Board-delegated powers considering the proposed transaction or arrangement. A Conflict of Interest Disclosure Statement must be submitted annually. Copies of disclosure statements filed by Board members shall be distributed to the Board annually. 2. When a conflict of interest is disclosed at a meeting of the Board or committee thereof, after disclosure of the financial interest, the interested person shall leave the Board or committee meeting while the financial interest is discussed and voted upon. The remaining Board or committee members shall decide if a conflict of interest exists. The interested person's leaving such meeting shall not affect whether a quorum exists at such meeting. 3. Procedures for Addressing the Transaction of Arrangement from Which the Conflict Arose: The chairperson of the Board or committee shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement. After exercising due diligence, the Board or committee shall determine whether Centegra can obtain a more advantageous transaction or arrangement with reasonable efforts from a person or entity that would not give rise to a conflict of interest. If a more advantageous transaction or arrangement is not reasonably attainable under circumstances that would not give rise to a conflict of interest, the Board or committee shall determine by a majority vote of the disinterested directors whether the transaction or arrangement is in Centegra's best interest and for its own benefit and whether the transaction is fair and reasonable to Centegra and shall make its decision as to whether to enter into the transaction or arrangement in conformity with such determination. 4. Violations of the Conflicts of Interest Policy: If the administration, the Board, or a committee has a reasonable cause to believe that a member has failed to disclose actual or possible conflicts of interest, it shall inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose. If, after hearing the response of the member and making such further investigation as may be warranted in the circumstances, the Board or committee determines that the member has, in fact, failed to disclose an actual or possible conflict of interest, it shall refer the matter to the Governors Affairs Committee for consideration, which shall subsequently recommend appropriate disciplinary and corrective action to such Board or committee. 5. The minutes of the Board and all committees with Board-delegated powers shall contain the names of the persons who disclosed or otherwise were found to have a financial interest in connection with an actual or possible conflict of interest, the nature of the financial interest, any action taken to determine whether a conflict of interest was present, and the Board's or committee's decision as to whether a conflict of interest, in fact, existed. The names of the persons who were present for discussions and votes relating to the transaction or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection therewith. 6. A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from Centegra for services is precluded from voting on matters pertaining to that member's compensation. Phys”

“The Board of Directors of Centegra Health System, through the Compensation Committee comprised of independent members free of conflict, reviewed executive compensation levels and other features of the compensation plan in accordance with the organization's approved compensation philosophy and strategy. The Committee is comprised of members of the Board of Directors, who are independent of Centegra management, have no personal interest in the compensation arrangements, are not related to, or under the control of any individual whose compensation arrangement is being reviewed and have no material business relationship with Centegra. The C-Suite's compensation is determined by the Compensation Committee in relation to comparable peers based on 990 market data. Compensation for other members of the executive staff is recommended by the CEO, reviewed by the Committee, evaluated against market data. The Committee approves all compensation decisions in advance of their implementation and documents its determinations and discussions. Its decisions and deliberations are thoroughly documented and meeting minutes are kept and distributed to the Committee members (for historical reference). The Compensation Committee uses a number of external resources and comparisons, and their review includes total compensation (cash compensation, plus benefits provided by Centegra) in relation to organizational performance and prevailing industry practices of comparably-sized organizations. They have engaged the services of a compensation consulting firm (Sullivan Cotter) specializing in the not-for-profit sector that has worked with Centegra and reports directly to the Compensation Committee. Reasonableness letters and documenation are provided to the organization after each review.”

“The organization makes its governing documents, conflict of interest policy, and financial statements available to the public upon request.”

“The primary mission of the Centegra Health System is to inspire and engage our community in their health and wellness. We coordinate the delivery of quality health care services with the innovative and responsible use of resources to promote wellness for the greater McHenry county area in Illinois.”

“The primary mission of the Centegra Health System is to inspire and engage our community in their health and wellness. We coordinate the delivery of quality health care services with the innovative and responsible use of resources to promote wellness for the greater McHenry county area in Illinois.”

“Executive Summary Centegra Health System (Centegra) coordinates the delivery of health care services by assisting in the management of Centegra Hospital- McHenry (Northern Illinois Medical Center) and Centegra Hospital - Woodstock (Memorial Medical Center), (The Medical Centers), and Centegra Health System Foundation, Health Bridge Corporation and NIMED Corporation (Affiliates). In March 2014 Centegra Health System broke ground at Centegra Hospital - Huntley. Centegra's mission is to inspire and engage our community in their health and wellness. We provide quality health care services with innovative and responsible use of resources and promote wellness for the greater McHenry County area in Illinois. During its fiscal year 2015, Centegra Health System sponsored 230 community events. These events touched more than 232,000 individuals. The Medical Centers provide optimum quality health care, delivered by competent hospital and medical center staff, to all whom seek its services regardless of race, creed, sex, national origin, handicap, age, or ability to pay. The primary mission of the Medical Centers is to enhance the health of the community as the preferred health care organization providing outstanding service and value. It is the Medical Centers' objective to serve the community with respect to providing health care services and education. Although reimbursement for services rendered is critical to the operation and stability of the Medical Centers, it is recognized that not all individuals possess the ability to purchase essential medical services. Therefore, in keeping with the Medical Centers' commitment to serve all members of its community, free care and/or subsidized care will be considered where the need and/or an individual's inability to pay exist. Medical Services are provided in a dignified manner to Medicare, Medicaid and indigent patients. System-wide, community benefits included approximately $5.9 million of charity care, over $45 million of government sponsored indigent health care, approximately $4.7 million of other community benefits, and over 89,000 community benefit hours. *The Medical Centers' services include, but are not limited to: Centegra Hospital-McHenry is a 179-bed facility located about 50 miles outside of Chicago. The hospital is the region's leading provider of advanced cardiovascular treatments through the Centegra Cardiovascular & Thoracic Center. It is also home to the Centegra Hip & Knee Replacement Center, the Centegra Sage Cancer Center and the Centegra Family Birth Center. As part of Centegra Health System, Centegra Hospital-McHenry achieved Magnet designation for nursing excellence. Centegra Hospital-McHenry provides sophisticated treatments and advanced technology to address the most serious medical conditions. These include: *Open-heart surgery and heart catheterizations *Joint replacement surgeries *A Level II Trauma Center and on-site Flight for Life helicopter *Certified chest pain and stroke centers *Advanced cancer treatments including radiation oncology and infusion services *Labor and delivery and on-site 24/7 obstetrics hospitalists and neonatologists *Intensive care *Medical-Surgical care and 24/7 hospitalist care *Outpatient surgery Centegra Hospital-Woodstock is a 106-bed facility located about 60 miles outside of Chicago. The hospital provides exceptional inpatient and outpatient care and has won top awards for patient safety and satisfaction. As part of Centegra Health System, Centegra Hospital-Woodstock achieved Magnet designation for nursing excellence. Centegra Hospital - Woodstock provides sophisticated treatments and advanced technology to address the most serious medical conditions, including: *A Level II Trauma Center and on-site Flight for Life helicopter *Certified chest pain and stroke centers *Intensive care *Medical-Surgical care and 24/7 hospitalist care *Outpatient surgery *Inpatient behavioral health services *Weight-loss surgery through the Centegra Heal”

“Equity Transfers $28,190,002”

“Description:purchased services - medical total fees:27897848”

“Description:purchased services - non-med total fees:20856085”

“Description:reference lab total fees:1569093”

“Description:consulting fees total fees:863495”

“Description:other fees total fees:1260155”