Memorial Hermann Foundation

“The Memorial Hermann Foundation has as its sole member Memorial Hermann Health System, both of which are 501(c)(3) non-profit entities.”

“The member has the authority to annually elect the board members of the organization and to terminate and replace them at its discretion.”

“The member has approval authority over the decisions of the board for amendments to the bylaws and articles of incorporation, annual operating and capital budget, the purchase or sale of substantial assets, and the merger or dissolution of the organization.”

“Memorial Hermann Foundation PROVIDES A COPY OF THE FORM 990 TO ALL MEMBERS OF THE GOVERNING BODY VIA A WEBSITE SET UP SPECIFICALLY FOR BOARD MEMBERS TO ACCESS VARIOUS BOARD MEMBER DOCUMENTS. THE FORM 990 IS REVIEWED BY MEMORIAL HERMANN FINANCIAL ACCOUNTING STAFF, BY SPECIFIC DEPARTMENTS INVOLVED IN RELATED SECTIONS OF THE RETURN, BY THE MEMORIAL HERMANN CHIEF ACCOUNTING OFFICER, PRIOR TO ITS FILING.”

“Memorial Hermann Foundation utilizes a conflict of interest survey and has codified its procedure in a policy. The policy is monitored by our Corporate Compliance Department through annual surveys of board members, corporate officers, management level employees, and other selected employees, physicians and vendors for all of its entities and related affiliates. In addition to responding to the survey, each recipient affirms that they have received a copy of the policy, has read and understood it, has agreed to comply with it, and understands that Memorial Hermann is a charitable organization that must engage in primarily tax-exempt purpose activities. The Corporate Compliance Department, Chief Legal Officer and the Corporate Audit Committee, consisting of independent board members, receive a report of all items disclosed. The Audit Committee Chair reports the existence of any conflicts to the Corporate Board of Directors. Memorial Hermann Foundation's conflicts of interest policy requires that Board members excuse themselves from discussions in which they have a conflict of interest. The policy also subjects Board members to disciplinary action if they are found to have violated the policy.”

“Memorial Hermann Foundation (MHF) has established communication channels to report problems and concerns including a telephone Helpline. Employee partners are encouraged to report problems or concerns either anonymously or in confidence via the Helpline when they deem appropriate. The Helpline establishes an avenue for employee partners or interested parties to report suspected criminal activity, and illegal or unethical conduct occurring within the organization in the event other resolution channels are ineffective or the caller wishes to remain anonymous. The Corporate Compliance Helpline is administered by an outside service in order to protect the anonymity of callers to the Helpline if they so desire to remain anonymous. All those who are employed in the Helpline operation or contracted organizations administering the Helpline are expected to act with utmost discretion and integrity in assuring that information received is acted upon in a reasonable and proper manner. MHF has established a strict non-retaliation policy to protect, from retaliation, employee partners and others who report problems and concerns in good faith. There shall be no retaliation against a MHF employee, independent contractor, vendor, allied health professional or medical staff member for reporting or raising a question regarding MHF compliance with a law or regulation. Those reporting suspected non-compliance who wish to remain anonymous may do so if they so choose. All reports of suspected non-compliance will be addressed in a confidential manner. The Corporate Compliance Officer or designee will always strive to maintain confidentiality during the compliance review and investigation process; however there may be a point where the identity of a reporter may need to be revealed where appropriate.”

“The officers presented in Part VII and Schedule J are not employed and paid by Memorial Hermann Foundation rather are employed and paid by Memorial Hermann Health System. The process for determining compensation for the Organization's CEO and disqualified persons is modeled after the requirements in IRC Section 4958 to establish the presumption of reasonable compensation. Compensation was reviewed and approved in advance of being paid by a Compensation Committee of the Board of Memorial Hermann Health System. The Committee is comprised of individuals who have no conflicts of interest. The Compensation Committee engages an independent third-party executive compensation consultant who provides comparable market data from published surveys and/or Form 990s of similar organizations. The compensation for each disqualified person is determined based on the market data. The Compensation Committee conducted a review of the comparability data and documented its discussion and decisions in minutes that are retained with the Organization's other governance materials. Disqualified persons of the organization undergo a review and Compensation Committee approval (as outlined above) on an annual-basis, and such approval is recorded in minutes. The executive compensation philosophy drives the strategy and design of Memorial Hermann's compensation package. The executive compensation philosophy is established and maintained by the Compensation Committee. The philosophy is as follows: Executive compensation should be tied to our long-term and short-term business strategies of each dimension of our business including, but not limited to: Quality & Safety, Service & Satisfaction, Operational Excellence, and Growth & People. Compensation should reflect the competitive marketplace so the Company can attract, retain and motivate talented executives. Compensation should be tied to our individual and business unit performance. Compensation programs and pay levels should be "Reasonable" within the definition of IRC Section 4958. We should balance any potential strategic, financial, operational and reputational risk with our pay-for-performance philosophy. Based on the above philosophy, Memorial Hermann's executive total compensation package includes a mix of fixed compensation and variable compensation. The following components are included in the executive total compensation package: base salary, annual incentive plan, long term incentive plan and deferred compensation plan. In addition to the compensation components listed above, the former CEO and President, Mr. Wolterman, has been provided with a retention agreement. Per the terms of this agreement, he will receive a lump sum payment in July 2016. This lump sum payment is being accrued over the life of the retention agreement (July 2009 to July 2016). The 2015 accrual is included in Column C of Part II on the attached Form 990 Schedule J. If Mr. Wolterman voluntarily leaves prior to July 2016, he does not receive any portion of this lump sum payment. Under certain circumstances (e.g., death or disability), Mr. Wolterman, or his beneficiary, would be entitled to a prorated portion of this lump sum payment.”

“The articles of incorporation, corporate bylaws, conflict of interest policy and financial statements of Memorial Hermann Health System and its affiliates are generally not made available to the public. If the inquirer provided a valid reason for desiring a copy of the documents that are related to the business interests of any of the Memorial Hermann Health System corporate entities, we would consider doing so.”

“The employees of the Memorial Hermann Foundation are record-kept and paid through the payroll system of Memorial Hermann Health System and reported under the Memorial Hermann Health System EIN for Form 941 and Form W-2 purposes. All costs of the compensation and benefits of the Foundation employees are reimbursed to the Health System. Corporate officers are employees of Memorial Hermann Health System and their salaries and benefits are not allocated amongst the various corporate entities for which they conduct employment activities.”

“Change in charitable trusts. Change in Cruts 114,228”

“Memorial Hermann Health System has independent committees for audits, governance, and compensation which perform their respective functions on a consolidated basis for all corporate entities. The audit committee hires the independent accountants and oversees all audits that are conducted within all affiliated entities for financial information, grants and awards, and qualified plans.”