Northwestern Memorial Healthcare

“Kevin poorten, loren foelske, and michael kulisz are both employees of kishealth system, the parent organization of kishwaukee physician group, inc. 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. Dr. Kulisz serves as the chief medical officer for the health system. In addition, other board members are employed by kishwaukee physician group (kpg) as physicians. As kevin poorten is the ceo of the controlled group and on the kpg board, this creates a business relationship with these employees. Dr. Erik englehart and azeem haleem are employed by kpg and serve on its board.”

“Kishhealth system is the sole member of kishwaukee physicians group, inc.”

“Per the organization's by-laws, kishhealth system, as sole member, reserves the power to elect or remove, with or without cause, any members of the board and approve, evaluate or remove, with our without cause, the practice administrator and any kpg officers.”

“Kishhealth system (khs) serves as the sole member and parent organization of kishwaukee physicians group (kpg). The bylaws of kpg state that kpg's board may not take action pertaining to the following without approval from the khs board: a. Adopting, amending, altering or repealing kpg's organizational documents b. Filing a voluntary petition of bankruptcy on behalf of kpg or authorizing a voluntary dissolution of kpg c. Electing or removing, with or without cause, any members of the board and approving, evaluating or removing, with or without cause, the practice administrator and any kpg officers and establishing compensation for such individuals, if any. D. Approving the strategic plan, annual operating and capital budgets of kpg and material deviations from such plans or budgets e. Approving any change in corporate membership of kpg or any plan of consolidation of kpg f. Establishing an affiliate of kpg g. Purchasing, selling, leasing, pledging or hypothecating any kpg property or entering into any contract for such purpose other than in the ordinary course of kpg's business. H. Entering into any contract or agreement that contemplates kpg spending in excess of $100,000 in any 12-month period and approving any management contract for the full operating of kpg. I. Approving all compensation paid to physician employees and/or physicians contracting with kpg, including compensation for both clinical and administrative duties,through compensation parameters established by the khs board's compensation committee; the compensation committee shall review such parameters annually to ensure that physician compensation represents fair market value for services rendered. J. Exercising any rights that kpg has as a shareholder or member of any subsidiary entity, including an affiliate. K. Approving and/or determining (1) the creation of new health services to be provided by kpg and the location of such health services; (2) the discontinuance of any health services provided by kpg and (3) the third-party payor arrangements (including without limitation, managed care plans) that kpg participates in and the negotiation and approval of such arrangements. L. Approving the creation and implementation of arrangements among kpg, khs, and/or one or more affiliates, including transferring money or property among such entities. M. Overseeing the quality of care provided to patients of kpg. N. Approving financial, accounting, human resources, employee benefit, and other policies and procedures (except patient care policies and procedures) and the appointment of auditors, legal counsel, vendors, contractors and consultants for kpg. O. Approving personnel decisions, including, without limitation, decisions to hire or terminate the employment of kpg personnel.”

“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.”

“Kishwaukee physician group, inc. Is not directly involved in determining the compensation of the ceo, executive director, or top management, as the individuals are employed through kishhealth system. Kishhealth system does comply with the requirements noted above. 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 administration.”

“Capital contribution from kishwaukee health system 4,100,000. Book/tax difference in amortization of intangibles 25,311. Rounding adjustment -1.”

“Responsibility for oversight of financial statements: 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. Kishealth system is the parent corporation of kishwaukee physicians group, inc.”