Children'S Physicians

“Children's Physicians consists of two members, Creighton University and Children's Hospital & Medical center. Each member designates four persons to the Board of Directors.”

“The actions listed below require unanimous resolution of the Children's Physicians Board and prior written consent of Creighton University and Children's Hospital & Medical Center: A. Executing agreements between Children's Physicians and either Creighton University or Children's Hospital & Medical Center (or their respective affiliates), accepting only those agreements which are specifically permitted by the express terms of this agreement, and then only upon reasonable, arms-length, good-faith, competitive terms (all of such permitted agreements to which Children's Physicians is a part of being herein called authorized Children's Physicians contracts); or B. Distributing to Children's Physicians members and Children's Physicians assets, except as expressly permitted by the specific provisions of the agreement; or C. Selling, distributing, issuing or transferring any stock or securities in Children's Physicians, or any rights or instruments convertible into or exchangeable for any stock or other securities in Children's Physicians; or D. Modifying or amending Children's Physicians' articles of incorporation or bylaws; or E. Changing the number of members of the Chidlren's Physicians Board from eight; or F. Undertaking such actions as may contravene or be a default of the provision of the agreement; or G. Merging or effecting any other business combination of or by Children's Physicians, as a result of which (without any other cause) the voting control of Children's Physicians held by any party shall be changed; or H. Paying or distributing any money, funds, compensation, payments, or fees to any party or its affiliates. except: 1) Pursuant to authorized Children's Physicians contracts, or 2) Repayment of loans; or I. Not directing the certified public accountant for Children's Physicians (herein called CHildren's Physicians CPA) to issue annual, certified financial statements on the books and records of Children's Physcians; or J. Selling all, or substaintially all, of the assets of Children's Physicians; or K. Creating subsidiaries and/or establishing corporate or non-corporate joint ventures by Children's Physcians; or L. Acquiring shares of or any interest in any corporation or other legal entity or business enterprise, or creating any partnership or other legal entity to which Children's Physicians is or will be a partner, shareholder, member or similar participant; or M. Changing or reorganizing Children's Physcians into any other legal form; or N. Taking any action which would adversely affect the tax-exempt status of either the parties or the tax exemption of income distrubted by Children's Physciains to them; or O. Fund Children's Physicians' capital needs with a contribution other than cash; or P. Employing or leasing physicians, opening new clinic sites, closing existing clinic sites, or consolidating clinic sites.”

“The Form 990 will be distributed electronically to Children's Physicians Board members for review via Director's Desk prior to filing with the IRS. However, since all compensation information will be redacted from the copy sent to the Board, the taxpayer is answering the question on Part VI, Line 11A "No".”

“Policies The conflict of interest policy applies to any person in a position to exercise influence in connection with any contract, transaction or arrangement presented to the Board of Directors or a Board committee for approval (interested person). This includes, but is not limited to, any director, officer, or member of a committee with board-designated powers. Each interested person has the obligation to annually submit a completed conflicts of interest questionnaire and has a continuing obligation to disclose any potential conflict of interest promptly. Each interested person signs annually an acknowledgment that states that the interested person has received, read and understands the conflict of interest policy, agrees to comply with the policy; understands that the policy applies to the Board of Directors and committees; understands that Children's Physicians is a not-for-profit organization that must engage primarily in exempt activities; agrees to report to the compliance officer any change to matters previously disclosed on the conflicts of interest questionnaire; states that the information provided in the conflicts of interest questionaire is true and accurate to the best of his/her knowledge and belief. The governance committee reviews each completed conflicts of interest questionnaire to determine if any further investigation of potential conflicts is necessary. When a potential conflict is voluntarily identified by an interested person or through disclosure by another person, the remaining board/committee members review the matter and determine whether a conlfict of interest exists. Only disinterested board/committee members may vote to determine whether a conflict exists. The interested person in question cannot be present during the vote. If a conflict of interest exists, the disinterested board/committee members determine whether a more advantageous contract, transaction or arrangement should be obtained. When considering whether to enter into the proposed contract, transaction, or arrangement, only disinterested board/committee members can vote to determine if it is in the best interest of Children's Physicians and for Children's Physicians own benefit. The interested person may be required to leave the room when the matter is voted on. Only disinterested board/committee members may vote on the matter. Failure to comply with the conlfict of interest policy may result in removal from the Board.”

“Policies Each year an independent company (Towers Watson) conducts a market analysis of the executive compensation. This infomration is presented to Children's Hospital & Medical Center's compensation committee, which is a sub-committee of the Board of Directors. Executive base salaries are targeted for the 50th percentile of the market. Towers Watson issues an annual reasonableness opinion letter regarding the appropriateness of executive pay levels. The compensation committee reviews base pay changes for Children's Physicians' President. The Board of Directors receives a report from the committee.”

“Governing documents and conflict of interest policy are not available to the public. Children's Hospital & Medical Center and affiliates audited financial statements can be obtained in Administration.”