Penn State Health

“Certain listed officers and board members also serve as officers and board members of a taxable entity.”

“Classes of members or stockholders: the filing organization's two members are the pennsylvania state university, a pennsylvania nonprofit corporation and instrumentality of the commonwealth of pennsylvania, and highmark health, a pennsylvania nonprofit corporation.”

“Electing members of governing body: directors shall be elected by the corporate members. Pursuant to specifications defined in the bylaws, the corporate members may at any time remove, with or without cause, any member of the board of directors.”

“Decisions requiring approval by members or stockholders: described in the bylaws dated july 15, 2021 and other applicable documents, the members of penn state health are the pennsylvania state university ("psu") and highmark health ("hh"). Subject to certain limitations and conditions described in the bylaws and other applicable documents, the members have reserved powers as follows: psu: - to determine the number of directors that will comprise the board of directors of the corporation, and to appoint and remove, with or without cause, a specified number of directors of the corporation; - to approve amendments to the articles of incorporation and bylaws of the corporation; - to approve all fundamental change transactions and all other transactions not in the ordinary course of business, including without limitation, all mergers, consolidations, divisions, sales of substantially all assets, and the liquidation or dissolution of the corporation; - to approve any indebtedness of the corporation or its controlled affiliates that would cause the debt to capitalization ratio of the corporation on a consolidated basis to be higher than a specified level; - to approve certain capital projects; - to approve the sale, lease, transfer or other disposition, and certain uses, of the land or buildings located on the east campus of the milton s. Hershey medical center; - to approve any change in the mission of the milton s. Hershey medical center; - to exercise the corporation's power to appoint and remove directors of the milton s. Hershey medical center; - to approve any change in the academic affiliation of the corporation or any of its controlled affiliates; and - subject to section 2.2 and 2.3, the member shall have the right and power to give such approvals and take such other actions as are specifically reserved to members of pennsylvania nonprofit corporations under the pennsylvania nonprofit corporation law. Hh: - to approve: (i) the conversion of the corporation to a for-profit entity or the merger of the corporation unless it is the surviving entity, (ii) voluntary dissolution of the corporation, (iii) filing of a voluntary petition for relief under any bankruptcy laws or appointment of a receiver or liquidator for any part of the corporation's assets or property or the making of a general assignment for the benefit of its creditors, or (iv) admission of a new member to the corporation; - to approve any change to the number of directors appointed by hh if such change results in a dilution of hh's board representation; - to approve certain amendments to the articles of incorporation and bylaws of the corporation; - to approve certain acquisitions by the corporation within a specified region of any an equity, membership or governance interest in or the right to receive any distributions/funds from any hospital, health system, ambulatory care facility, skilled nursing facility, home health agency, hospice, physician practice, or other healthcare provider entity; - to approve certain corporation borrowings or guarantees; - to approve certain changes to the agreement between psu and the corporation related to their academic affiliation; - to approve certain changes to the strategic plan for the community-based care delivery network component of corporation and related committee charter; - to approve certain investments in excess of specified amounts; - to approve the entry into certain new arrangements between psu and the corporation or certain modifications to existing arrangements between psu and the corporation; - with certain exceptions, to approve the divestiture of all or substantially all of the corporation's assets or a controlling membership interest in the corporation to an unaffiliated third party; and - subject to section 2.2 and 2.3, the member shall have the right and power to give such approvals and take such other actions as are specifically reserved to members of pennsylvania nonprofit corporations under the pennsylva”

“Review of form 990 by governing body: the form 990 is prepared by an external accounting firm; it is reviewed by accounting/finance department personnel and the chief financial officer, and then distributed to all members of the board for review and comment before it is filed with the irs.”

“Conflict of interest policy: the filing organization regularly and consistently monitors and enforces compliance with its conflict of interest (coi) policies for officers, directors, and key employees (covered persons). Per the policy, no covered persons may engage in any transaction or arrangement or undertake positions with other organizations that involve a conflict of interest, except in compliance with the policy. Every covered person shall disclose all actual and potential conflicts through an annual online disclosure statement and as matters involving an actual or potential conflict arise. The board will evaluate the disclosures and the material facts relating to the transaction or arrangement giving rise to the potential conflict to determine whether they involve actual conflicts of interest and may attempt to develop alternatives to remove the conflict from the transaction or arrangement. A covered person who has an actual or potential conflict of interest shall not be present for or shall leave any portion of a meeting at which the board of directors or a committee is voting to determine whether a conflict exists, but may be present prior to the vote to make presentation to the board or committee to disclose additional facts, or to respond to questions. The filing organization may enter into a transaction or arrangement in which a covered person has an actual conflict of interest if a majority of directors who have no interest in the transaction or arrangement approve the transaction or arrangement at a board or committee meeting after determining that the transaction or arrangement is fair and reasonable to the corporation, any covered person who has a conflict with respect to the transaction or arrangement does not participate in and is not present for the vote regarding such transaction or arrangement (except that the covered person may appear at a meeting to answer questions), and if the transaction or arrangement involves compensation or other financial benefit to the covered person, the board relies on appropriate comparability data to determine reasonableness. The filing organization will document the foregoing in the minutes of board and committee meetings, as applicable. Each covered person must sign a statement that affirms that he or she has received a copy of the coi policy, has read and understands it, and has agreed to comply with it. If the board of directors has reasonable cause to believe that a covered person has failed to comply with the policy, the board may counsel the covered person regarding such failure and, if the issue is not resolved to the board's satisfaction, may consider additional corrective action, including removal from the board of directors or other position with the filing organization, as appropriate.”

“Process used to establish compensation of ceo, officers, and key employees: the board compensation committee is delegated responsibility by the board to make and recommend to the board the compensation decisions for its key executives, including the chief executive officer, chief financial officer, other officers and all disqualified persons (as defined by treasury regulations). The committee has strong governance processes in place to ensure best practices and that compensation decisions for executives are reasonable and supportive of the organization's leadership talent needs. The committee's compensation review process is structured to satisfy and comply with the requirements of the rebuttable presumption of reasonableness, under the intermediate sanction regulations (irc section 4958). 1. The committee of the board is authorized by the board of directors to review and approve all compensation (including executive benefits) arrangements. 2. The committee is comprised of directors that are free of material financial conflict with respect to the compensation being reviewed. 3. Annually, the compensation committee, engages an independent compensation consultant to conduct a total compensation analysis for the organization's executives. 4. The committee reviews and approves these compensation arrangements in advance of implementation by reviewing market comparability data provided by its independent third-party consultant and documented in comprehensive reports. 5. The committee documents its decisions, and the basis for its decisions, in a timely manner within meeting minutes. 6. The committee also receives professional opinions with respect to reasonableness from its independent compensation consultant, as such term is defined within intermediate sanctions regulations. 7. The committee reports its actions on a regular basis to the full board.”

“Required documents available to the public: the organization's conflict of interest policy and governing documents are available to the public upon request. The audited consolidated financial statements of the pennsylvania state university and its subsidiaries (which includes penn state health) are available at www.psu.edu.”

“Part vii and schedule j reflect certain directors and officers receiving compensation and benefits from a related organization. Please note that remuneration to these directors and officers was for services rendered as full-time employees of a related organization, not for services rendered as directors of the filing organization.”

“Estimated number of volunteers: 11 penn state health is reporting the noncompensated community volunteer members of its governing body.”

“Transfers to the penn state college of medicine -56,863,628. Other changes in net assets -195,906.”