Olmsted Medical Center

“The corporation shall have, and the board of trustees hereby establishes a board of governors, which shall have and exercise the authority of the board of trustees in the day-to-day management of the medical business and affairs of the corporation, except for those matters for which the trustees reserves the powers to approve under the bylaws. The board of governors shall at all times be subject to the control and direction of the board of trustees. The board of governors shall establish a plan to monitor, evaluate, and maintain the quality of patient care and shall report at least annually to the board of trustees. The board of governors shall also report at least annually to the board of trustees concerning charity care, education, and research activities. The board of governors shall consist of at least seven (7) members. Five (5) of the members shall at all times be the same individuals who serve as clinic trustees, and shall have terms expiring as of the same time as the expiration of their terms as clinic trustees. Three (3) of the members shall be the chief executive officer of the corporation and two medical vice presidents, who shall serve as ex-officio voting members. If the president of the corporation is not a clinic trustee, he or she shall serve as an ex-officio voting member.”

“The board of trustees shall consist of fifteen (15) members. Five (5) members of the board of trustees shall be clinic trustees, and the remaining ten (10) members shall be public trustees. If the president of the corporation is not an elected clinic trustee, he or she shall serve as an ex-officio voting member. Clinic trustees shall be elected and removed as follows: a nominating committee will be established by the board of governors in its sole discretion to solicit candidates for the position of clinic trustee. A meeting of the voting staff shall be held on an annual basis for the purpose of electing qualified successors for those clinic trustees whose terms have expired or are due to expire within six (6) months after the date of the meeting. At such meeting, the voting staff shall vote for that number of clinic trustees whose terms are expiring from the slate of candidates provided by the nominating committee and those otherwise qualified voting staff members who may have announced their candidacy. Public trustees shall be elected and removed as follows: the ten (10) public trustees shall be elected as follows: (i) a nominating committee of the board of trustees consisting of one (1) clinic trustee, and two (2) public trustees shall select a candidate or slate of candidates; and (ii) those currently serving public trustees shall elect, by a plurality vote, the public trustees from the candidate or slate of candidates nominated by the nominating committee.”

“The form 990 is prepared by an external accountant. A draft of the form 990 is reviewed in detail by the financial services manager, controller and cfo. Any necessary corrections and adjustments are made. The form 990 is reviewed by the ceo and cfo and presented to the compensation committee. The final form 990 is made available to the board members for their review prior to filing with the irs”

“Each clinic and public trustee and principal officer of ("covered members") of the corporation annually signs a statement which affirms that each person has received and understands the conflicts of interest policy, has agreed to comply with the policy, and understands that the corporation is a charitable organization and that in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes. Unless a previously disclosed and documented conflict of interest is known to the board, all conflicts of interest are disclosed to the board by the covered member with the conflict(s). A covered member has disclosed a conflict if he or she promptly provides a description of the material facts comprising the conflict of interest to the board. If a covered member has a conflict of interest on any matter considered by the board, such matter is approved by the board in a manner that complies with the requirements of the third restated bylaws of olmsted medical center and minnesota statue section 317a.255. Such law currently states that a matter involving a conflict of interest will not be void or voidable if approved by one of the following procedures: the contract or transaction was, and the person asserting the validity of the contract or transaction has the burden of establishing that the contract or transaction was, fair and reasonable as to the corporation when it was authorized, approved, or ratified; the material facts as to the contract or transaction and as to the trustee's interest are fully disclosed or known to the members and the contract or transaction is approved in good faith by two-thirds of the members entitled to vote, not counting any vote that the interested trustee might otherwise have, or the unanimous affirmative vote of all members, whether or not entitled to vote; or the material facts as to the contract or transaction and as to the trustee's interest are fully disclosed or known to the board or a committee, and the board or committee authorizes, approves, or ratifies the contract or transaction in good faith by a majority of the board or committee, not counting any vote that the interested trustee might otherwise have, and not counting the trustee in determining the presence of a quorum.”

“In order to ensure that all olmsted medical center (omc) executive compensation decisions are competitive, equitable, uniformly administered, and consistent with market practices, omc follows recommended best practices. The goals of executive compensation are to attract and retain highly qualified personnel, to maintain compensation levels commensurate with the scope of responsibilities for each position, and to reward outstanding performance. Omc will seek management talent by conducting national searches for qualified applicants for any vacancies at the medical vice president hospital/surgical services, vice president medical services and ceo positions in addition to vice president positions as necessary. The same philosophy is applicable to the position of omc president. Omc engages an external consultant who annually compiles a peer group compensation analysis and on a two year basis compiles a peer group compensation and benefits analysis. Peer groups for executive compensation, which includes base salaries, incentive and benefits, will be provided for health delivery systems with a minimum of a hospital and an employed physician network and net revenues roughly similar to the revenues of olmsted medical center. Most recently a compensation peer review study was completed for the ceo, president, medical vice presidents, chief medical information officer, and vice presidents (executive team) and presented to the board executive compensation committee. The board of governors receives an executive summary. The executive compensation committee receives a summary of the executive team's compensation to ensure it is in alignment with the same compensation methodology and agreed upon methodology of the executive compensation system of omc. These positions include the medical vice presidents, chief medical information officer and vice presidents of omc. The executive compensation committee will set the compensation of the president, ceo, medical vice president hospital/surgical services and vice president medical services and minutes are kept of these discussions. The board of trustees, acting through the board of trustees compensation committee, must approve the executive compensation policy and process of determining executive compensation and benefits. In addition, the physician salaries are calculated annually, using regional physician salary comparison guides factoring in productivity and quality measures, and reviewed on an annual basis for market reasonableness by an independant consulting firm. The physicians receive no compensation as attending board members. These discussions are noted in the minutes of the board of trustees compensation committee annual meeting. The board of trustees compensation committee reports to the full board of trustees on an annual basis the completion of such duties and are also noted in the minutes.”

“The governing documents and conflict of interest statements are not made available to the public. The annual form 990 & attached audited financial statement report is available in accordance with the public inspection of the return requirements.”