Kishhealth System

“Kevin poorten and loren foelske are both employees of kishhealth system. However, they also serve on the board of directors or as officers of the related tax-exempt subsidiary organizations, including kishwaukee hospital, valley west hospital, kishhealth system hospice, kishwaukee physician group, center for family health, center for family health malta, kishhealth home care, and kishhealth foundation. Mr. Poorten is president and ceo of kishhealth system and serves as an ex-officio director for all organizations related to kishhealth system. Mr. Foelske serves as the vice-president - finance of kishhealth system, and serves as the top financial official for all related entities. The following individuals are officers or key employees of kishhealth system and are also considered key employees of valley west community hospital and kishwaukee community hospital. They are all compensated by kishhealth system: brad copple, president kh & vwh pam duffy, vp patient care joe dant, vp development mike kokott, asst. Vp marketing roger health bell, vp and chief information officer mark thate, vp human resources (retired december 2013) dr. Michael kulisz, chief medical officer david proulx, vp operations, vwh several members of the kishhealth system board of directors also serve on the board of directors for a related entity. All entities are wholly owned subsidiaries of kishhealth system. These members include: michael cullen, also serves on kishwaukee hospital, center for family health, center for family health malta, and kishwaukee physicians group boards. Terrence duffy, also serves on valley west community hospital board joe dant, also serves on center for family health, center for family health malta, kish health home care and health progress, inc boards. Ann west, also serves on kishhealth foundation board dr. Michael kulisz, also serves on boards of kishwaukee physicians group and kish health home care pam duffy also serves on the board of kish health home care jagdish patel also serves on the valley west hospital board. Tom matya, also serves on kishhealth foundation board and kishwaukee hospital board john moulton, also serves on health progress, inc. Board in addition, promod vohra serves as a director of khs. His wife is an employee of khs. Dr. Photine liakos, also serves as a board director owns an interest in midland sugical center. Kishwaukee hospital, a subsidiary of khs, owns a 74.5% interest in this entity.”

“Kishhealth system maintains several classes of members. They are as follows: khs shall have honorary members who shall not have voting rights in the corporation. Honorary members shall continue as honorary members provided they have satisfied the requirements of membership. Honorary members shall not have meetings except that (i) honorary members shall be invited to attend informational meetings as called by the board of directors from time to time; and (ii) honorary members shall be invited to attend a special informational meeting prior to the adoption by the khs board of any of the actions that are described in section 4.1.d, g, h or q below (with respect to khs, kh or vwh). Any person (which term shall include, for purposes of this section 3.1, individuals and firms, corporations, associations, clubs, or societies for the duration of their existence) may become an honorary member of khs permanently or from time to time, as the case may be, by meeting the qualifications for one of the following categories of members: a. Participating member. Any person who has contributed property or cash or both aggregating $100 or more but less than $500 in value to khs, kh, vwh or the health foundation shall be a participating member of khs. Any person designated a participating member shall retain such designation for one year following the date of his, her or its qualifying contribution. B. Contributing member. Any person who has contributed property or cash or both aggregating $500 or more but less than $5,000 in value to khs, kh, vwh or the health foundation shall be a contributing member of khs. Any person designated a contributing member shall retain such designation for one year following the date of his, her or its qualifying contribution. C. Life member. Any person who has contributed property or cash or both aggregating at any time $5,000 or more but less than $10,000 in value to khs, kh, vwh or the health foundation shall be a life member of khs. Any person designated a life member shall retain such designation. D. Founder. Any person who has contributed or pledged property or cash or both aggregating at any time $10,000 or more in value to khs, kh, vwh or the health foundation shall be a founder of khs. Any person designated a founder shall retain such designation. E. Service member. (1) any person who has contributed at least 60 hours on a fiscal year basis of unpaid voluntary service to kh or vwh shall become a service member of khs. (2) any person who serves on the khs board or on any governing board of any subsidiary corporation of khs shall be a service member of khs while serving on the khs board or such subsidiary corporation board.”

“A draft copy of form 990 is provided to the governing body (board of directors) and the goverance committee for review by the return preparer prior to filing. The organization's ceo, cfo, and other members of the accounting department are also provided a copy of the return for their review. The chair of the audit committee and the audit committee members are also provided draft copies and review. If changes are necessary, they are reported to the return preparer and incorporated into the final return.”

“Individuals covered by the organization's conflict of interest policy and considered interested persons, include members of the board of directors of any entity within the health system, kishhealth system officers, any committee member, any individual with ultimate responsibility for implementing board decisions or supervising the management, administration, or operation of the organization, and immediate family members of those listed. It is the duty of these interested persons to self-disclose any conflicts of interest. Conflicts of interest are investigated by appointed members of the kishhealth system governance committee on an ongoing basis. If it is determined that an individual failed to disclose an actual or possible conflict of interest, it shall inform the individual of such a belief and afford him an opportunity to explain. After said explanation, the board shall take appropriate disciplinary and corrective action as deemed necessary. An interested person deemed to have a conflict must not be present during discussion or votes related to the transaction. The conflict of interest policy is reviewed by the board annually and updated as needed.”

“Through the oversight of the board of directors executive compensation committee, the kishhealth system executive total compensation program will be competitively positioned in the market place of relevant organizations and fall within the safe harbor guidelines established by the intermediate sanctions rules. The executive compensation committee is made up of three members of the board of directors who meet the board approved definition of "independent directors". Annually the executive compensation committee contracts with sullivan, cotter and associates, an independent human resources consulting firm to provide the committee analysis and comparability data. Using the supplied data the compensation committee approves each executive's total cash compensation and provides contemporaneous substantiation of the deliberation and decision. Total cash compensation is defined as the sum of base salaries plus incentive awards. Based on the comparability data and the performance of each executive in meeting goals and strategic objectives, the executive compensation committee approves increases and incentive awards for each executive within the guidelines established. The executive compensation committee reports on all compensation matters to the full board of directors.”

“The organization's governing documents are available to the public upon request in writing to adminstration.”

“Loss on equity method subsidiary reported on separate company return - hpi -423,434. Equity contribution to subsidiaries -1,325,000. Equity distribution from subsidiaries 9,361,000. Loss on equity method subsidiary reported on separate company returns -4,286,095. Adjustment to adjust subsidiary balances to actual -3,010,497. Equity distribution from liquidated subsidiary 160,000.”

“No changes in this process were made during the tax year. The organization maintains an independent audit committee which is responsible for oversight of the audited financial statements. This committee is also responsible for the selection of the independent auditor. Members of the audit committee are also members of the kishhealth system board of directors.”